Shopping
for health insurance can certainly feel intimidating. Selecting the right policy
based on your needs and budget can be tricky, and understanding the basics
before you buy is key. Let’s dive in.
There Are Many Types of Health Insurance Policies:
- Point of Service (POS) plans combine features of HMOs and PPOs (defined below). They require a primary care physician (PCP) and referrals for specialists but allow insureds to see out-of-network providers.
- Preferred Provider Organizations (PPO) offer more flexibility in choosing providers and do not require referrals.
- Exclusive Provider Organizations (EPO) are a combination of HMOs and PPOs. They require use of in-network providers but do not require referrals for specialists. They usually have lower premiums than PPOs but are less flexible.
- Health Maintenance Organizations (HMO) require insureds to choose a PCP and get referrals to see specialists. They typically have lower premiums and out-of-pocket costs but require you to see in-network providers.
Evaluating Your Needs:
If you
have pre-existing health conditions, a plan with comprehensive coverage and
lower out-of-pocket maximums may be ideal. If you visit a doctor regularly, a policy
with lower co-pays and deductibles could be more cost-effective. Those who take
prescription medications should review the list of covered medications to
ensure any prescriptions needed will be covered. If you prefer specific doctors,
check to see if they are in or out-of-network for the policies you are
considering. Does your spouse/ partner need coverage as well? It may or may not
be beneficial to insure under the same policy since healthcare needs are rarely
the same.
Comparing Costs:
Your
monthly cost for insurance (the premium) is important but this isn’t the only
cost to consider. The amount you pay out-of-pocket before insurance begins to
cover expenses is called the deductible. Higher deductibles usually equal
lower premiums. Co-pays are fixed amounts you pay for specific services
($20 for a generic drug, for example), while co-insurance refers to a
percentage of the cost (30% of a surgery, for example.). Policies with lower
co-pays and co-insurance usually have higher premiums. The maximum amount you
will pay in a calendar year for covered services is referred to as the out-of-pocket
maximum. After reaching this limit, insurance covers 100% of expenses for
the remainder of that year.
Understanding Subsidies & Enrollment Periods:
Enrollment
for health insurance occurs during designated periods. Open Enrollment is
the annual time period during which you can enroll in or change individual or
employer-sponsored health insurance policies. Enrolling outside of this
timeframe may limit your options for coverage unless you qualify for a Special
Enrollment Period (SEP). SEPs are triggered by qualifying life events (QLE)
such as marriage, loss of employer-sponsored coverage, etc.
If you purchase
individual health insurance through the Marketplace (www.healthcare.gov), you
may be eligible for a subsidy (premium tax credit) to help lower your monthly cost.
Eligibility is based on income and other factors. Options vary by state. Check
with your state insurance department for details applicable to your state of
residence.
If electing
health insurance offered by your employer, government subsidies are not available.
Employers typically offer enrollment during the on-boarding process (for ex. at
1, 30 or 60 days after your first day of employment). Not all employers are
required by law to offer health insurance. This varies by state, size of
employer and other factors.
With a
little homework and guidance, selecting the best health insurance policy for
your needs and budget can be accomplished rather easily. Keep in mind health
insurance is an important investment in your financial future for many years to
come.
Mandy H. Walker is a licensed insurance broker & AVMA LIFE Representative serving SAVMA & AVMA members nationwide since 2005.