Choosing a health insurance plan isn’t easy. The terminology can be overwhelming, and comparing the facts and figures gets confusing. Still, it’s vital to have insurance so you can protect your family’s wellness and finances.
One illness or accident can doom your immediate financial future if you don’t have health insurance. The National Consumer Law Center reports that nearly 52% of old bills submitted to collection agencies are related to medical debt and that medical bills are the biggest reason Americans file for bankruptcy.
But just how do you go about shopping for medical insurance? Read on for some tips.
Determine Your Insurer
When you’re hired at a new job, your employer will lay out the health insurance benefits to you, and you might have a few options to choose from. Your employer likely will pay a share of the monthly premium; you’ll pay the rest with a payroll deduction.
If you’re a gig worker or work for a small business that isn’t required by law to offer health insurance, your option is to turn to the government-sponsored marketplace to shop for a plan that fits your budget and your family’s needs. By visiting Healthcare.gov, you’ll be directed toward your state’s marketplace, if it has one, or you’ll shop for plans on the federal site. Depending on your income, you could qualify for a premium tax credit to help you pay for your insurance.
Register in Open Enrollment
You’re allowed to sign up for insurance at only specific points in the year.
For employer-sponsored insurance, your hiring represents your first chance. If you bypass that, your next opportunity comes during open enrollment, a once-a-year event that allows you to pick a plan through your workplace or change your existing insurance. The marketplace has open enrollment, too, and it typically falls in autumn.
Can you get insurance coverage outside the open enrollment period? The answer is yes, if you’ve had what is called a “qualifying life event.” Such events include a change in marital status, either by being married or divorced; having a baby or adopting a child; losing your job and the insurance coverage that came with it; the death of the family member who held the insurance; moving to a location where your existing insurance isn’t available; becoming ineligible for Medicaid and similar plans; and turning 26 and losing eligibility through your parent’s insurance.
Know the Acronyms
If you’re a first-time insurance shopper, you’ll be introduced to a variety of unfamiliar acronyms — HMO, EPO, PPO and POS among them. Each is a type of plan that impacts the cost of your premiums and outlines the doctors and hospitals that can treat you. Among the keys to look for: whether your existing primary-care doctor or any specialist you see participates with the plan, or whether you need a referral before seeing a specialist.
Check the Benefits
Documents from both your employer’s health plan and the marketplace will show you a summary of benefits, outlining your financial commitment beyond your monthly premiums.
In this section, you’ll see your annual deductible – the amount you pay before your insurance begins to pay for office visits or procedures – as well as your maximum out-of-pocket costs per year. The summary also will show you how much you’ll pay for things such as a visit to the emergency room, outpatient surgery or a hospitalization, listed in either a flat fee or a percentage of the cost. Your benefits for annual visits, prescriptions, lab work and mental-health care also will be listed.
Look at Network vs. Out of Network
Doctors and healthcare facilities will be “in network” or “out of network.” Your benefits will be greater if you use a provider who is in the network, and you’ll pay more for a visit with a provider outside of it. Before signing up, look to see whether your doctor is in network. If you don’t have a preferred doctor, still check the choices in network to make sure doctors and facilities are close to you — which is especially important if you live in a more rural network.
Consider Your Family’s Health
If you’re single and healthy, a higher-deductible plan — one that will carry a lower premium — might work for you. But if you have a chronic disease, plan to have a baby or have children who are prone to things such as asthma attacks and sports injuries, a lower-deductible plan will cost more but provide greater benefits as the year progresses.
Choosing a health insurance plan isn’t something to take lightly because it can have a significant impact on your personal finances. While it is impossible to predict illnesses or accidents that might arise in the coming year, it is wise to choose a plan that offers you the best coverage for pre-existing conditions as well as health issues you envision, such as physical therapy to treat a lingering back issue or prenatal and maternity care. You’ll pay more each month for an upgraded plan, so weigh the potential financial benefits as you make your choice.
If you have questions, your company’s HR department might have the answers, or you can call the insurance plan’s customer service representatives. If you’re shopping through the marketplace, you can enlist the free assistance of a navigator — a person or organization trained to help you wade through the options.
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