Making sense of choosing your insurance plan
By Christopher Wolfington
For those who are actively participating in the health insurance marketplace for the first time or are paying for a major health issue for the first time, you may be surprised at the complexity of the financials. Even if you have health insurance, you’ll need to pay for something. But what you have to pay for can be radically different depending on which insurance plan you have. That is why choosing the best insurance plan for you is a very important decision.
Not all insurance plans are the same. While lots of choices may not be available to everyone, it’s important to know insurance plan details if you do need to go to the hospital or doctor’s office.
Key insurance factors
Every insurance package features the same core terms which designate what kind of financial support you can receive.
- Premium – this is the monthly amount you pay, regardless if you use any services or not
- Deductible – the amount of money you must pay before insurance kicks in
- Coinsurance – your share of the costs of a covered service
- Copay – the base portion of payment that you shoulder for medical services; usually
- Out-of-pocket maximum – total amount you pay before insurance pays 100% of all costs; like deductible it usually resets yearly
- Network Providers – Most insurance plans give a cost preference to ‘in network’ providers, and going outside of the insurance network will result in higher costs/lesser coverage
Though it may seem simple, these factors are the most important in choosing your plan (though they are not the only ones). If you are confident in your track record in staying healthy, for instance, you could choose the plan with the lower premiums over the plan with the higher premiums but the lower deductible and out-of-pocket maximum.
Vision and dental
If you have vision correction or have had even minor dental work done, you recognize the help that vision and dental insurance can provide. But vision and dental insurance are not generally included in standard healthcare plans. Thankfully, many healthcare plans have separate, optional vision and dental coverage. Since even healthy individuals can heavily use both of these services, keep them in mind when selecting your plans.
The fine print
While the standard insurance factors and vision/dental are important to your choice, the fine print can be extremely important to the overall usefulness of the plan in regard to your specific health needs. For instance:
- Does the plan make it financially unfeasible to ever visit an out-of-network provider?
- Is there an annual limit on the plan?
- What isn’t included in out-of-pocket limits?
- Are there any services the plan doesn’t cover?
- What are the policies/coinsurance numbers on prescription drugs?
While certain plans may end up looking nice, the specific fine print may make or break the plan, so keep an eye out for what you need.