How to Choose the Best Health Insurance for You
Besides helping with routine expenses, having health insurance removes some of the stress and anxiety that goes with handling a medical emergency. In most cases, health insurance is provided by your employer, although you usually have to pay a portion of the premium. If your employer doesn't provide insurance or you don't work, your spouse's employer may provide health insurance for your entire family.
Even employer-provided policies typically cost you money, and it's important to make sure you choose the right coverage for your family. Here are some things you need to consider.
Type of Plan
When it comes to choosing the best health insurance plan, you first have to determine whether it's a managed care plan or an indemnity health plan. Managed care is provided by either a Preferred Provider Organization (PPO) or a Health Maintenance Organization (HMO). Regardless of the type, you can expect to pay an amount out of your own pocket for most services.
An indemnity health plan — also known as a fee-for-service plan — requires you to pay a percentage of the cost and split the remaining balance with your insurance company. One benefit of an indemnity plan is you get to choose your own doctor, unlike managed care.
PPO or HMO
The two types of managed care plans have some differences. With a PPO, you or your employer get a discount when you use one of the physicians provided by the plan, but you could choose to go to a doctor outside the system if you're willing to pay more of the cost yourself.
An HMO, on the other hand, requires you or your employer to pay a fixed monthly fee for the healthcare services you may need. Unlike a PPO, the plan doesn't allow you to consult a doctor who isn't under contract with your HMO provider. You must see one of the plan's doctors to use your coverage.
Coverage Options and Limits
Once you choose the type of health insurance plan you want, you need to carefully examine the options and limits included in your policy. Apart from providing general healthcare, your policy should cover other items such as vision care and dental. It's also preferable for a policy to cover routine examinations, including pap tests, mammograms, immunizations and more.
The basic rule in picking health insurance is that it should not have a lifetime benefit maximum that could halt your coverage if you have a serious medical condition. If you can't avoid this restriction, choose a policy with the highest available annual and lifetime maximums.
Health Plan Network
As mentioned, network-based health insurance has limitations on which doctors you can see. If you go to an in-network doctor, you can expect to pay a lower cost, as these doctors are already under contract with the insurance company. If you see a doctor outside the network, you have to pay more of the cost yourself.
That means you need to verify your existing doctors are in the network if you want to continue seeing them for healthcare. If this isn't clear, you can ask your doctor directly if he or she works with a particular insurance company and plan.
On the other hand, if you don't have a preferred doctor, you should choose a plan with a large network. This ensures you have plenty of options to choose from when finding the best doctors.
Before you pick a health insurance policy, make sure the provider has clearly laid out the amount of money you will have to pay on your own. The general rule is that the lower your premium, the higher your out-of-pocket expenses.
This is why you have to consider how often you normally see a doctor or need emergency care. You also have to think about the medication you regularly take. If you're planning to have a baby, you may want to choose a plan with a higher monthly premium to get increased coverage for upcoming large expenses. Additionally, if you have a chronic condition, such as diabetes, a plan with lower out-of-pocket expenses could be better in the long term.