The health insurance landscape can be tricky to navigate.
Here’s a start-to-finish guide to choosing the best plan for you and your
family, whether it’s through the federal marketplace or an employer.
Step 1: Find your marketplace
Most people get health insurance through an employer. If you’re one of
them, you won’t need to use the government insurance exchanges, or
marketplaces. Essentially, your work is your marketplace.
If your employer offers health insurance and you still wish to search for
an alternative plan in the exchanges, you can. But plans in the marketplace are
likely to cost a lot more. Most employers that provide insurance pay a portion
of workers’ premiums, so they’ll likely offer the least expensive option.
If your job doesn’t provide a health insurance benefit, shop on your
state’s Affordable Care Act marketplace, if available, or the federal
marketplace to find the lowest premiums. Start by going toHealthCare.gov and
entering your ZIP code. You’ll be sent to your state’s exchange if your state
is green on the map below. Otherwise, you’ll use the federal marketplace.
You can also purchase Health insurance through a private exchange or
directly from an insurer. If you choose these options, you won’t be eligible
for premium subsidies, which are income-based discounts on your monthly
premiums.
Step 2: Compare types of health
insurance plans
You’ll encounter some alphabet soup while shopping for plans; the most
common types are HMOs, PPOs, EPOs, or POS plans. The kind you choose will help
determine your out-of-pocket costs and which doctors you can see.
While comparing plans, look for a summary of benefits. Online
marketplaces usually provide a link to the summary and show the cost near
the plan’s title. A provider directory, which lists the doctors and clinics
that participate in the plan’s network, should also be available. If you’re
going through an employer, ask your workplace benefits administrator for the
summary of benefits.
Comparing health insurance plans: HMO
vs. PPO vs. EPO vs. POS
Plan Type
|
Do you have to stay in network to
get coverage?
|
Do procedures & specialists
require a referral?
|
Best for you if:
|
HMO: Health Maintenance Organization
|
Yes, except for emergencies.
|
Yes
|
You want lower out-of-pocket costs and a primary doctor that coordinates
your care for you, including ordering tests and working with your
specialists.
|
PPO: Preferred Provider Organization
|
No, but in-network care is less expensive.
|
No
|
You want more provider options and no required referrals.
|
EPO: Exclusive Provider Organization
|
Yes, except for emergencies.
|
No
|
You want lower out-of-pocket costs but no required referrals.
|
POS: Point of Service Plan
|
No, but in-network care is less expensive; you need a referral to go out
of network.
|
Yes
|
You want more provider options and a primary doctor that coordinates your
care for you, including ordering tests and working with your specialists.
|
When comparing different plans, put your family’s medical needs under the
microscope. Look at the amount and type of treatment you’ve received in
the past. Though it’s impossible to predict every medical expense, being aware
of trends can help you make an informed decision.
If you choose a plan that requires referrals, such as an HMO or POS, you
must see a primary care physician before scheduling a procedure or visiting
with a specialist. Because of this requirement, many people prefer other plans.
POS and HMO plans may be better if you don’t mind your primary doctor
choosing specialists for you; one benefit of this system is that there’s less
work on your end, since your doctor’s staff coordinates visits and handles
medical records. If you do choose a POS plan and go out of network, make sure
to get the referral from your doctor ahead of time to reduce out-of-pocket
costs.
If you’d rather choose your doctors, you might be happier with a PPO or
EPO. An EPO may also help you lower costs as long as you find providers in network;
this is more likely to be the case in a larger metro area. A PPO might be
better if you live in a remote or rural area with limited access to doctors and
care, as you may be forced to go out of network.
Step 3: Compare health plan networks
Costs are lower when you go to an in-network doctor because insurance
companies contract lower rates with in-network providers. When you go out of
network, those doctors don’t have contracted rates, which costs your insurance
company, and you, more.
If you have preferred doctors and want to keep seeing them, make
sure they’re in the provider directories for the plan you’re
considering. You can also directly ask your doctors if they take a
particular health plan.
If you don’t have a preferred doctor, you’ll probably want a plan with a
large network so you have more choices. A larger network is especially
important if you live in a rural community, since you’ll be more likely to
find a local doctor who takes your plan.
Eliminate any plans that don’t have local in-network doctors and those with
very few provider options compared with other plans.
Step 4: Compare out-of-pocket costs
Nearly as important as network size is how costs are shared. Any plan’s
summary of benefits should clearly lay out how much you’ll have to pay out of
pocket for services. The federal marketplace website offers snapshots of these
costs for comparison, as do many state marketplaces.
This is where it’s useful to know a few health insurance vocabulary words.
As the consumer, your portion of costs consists of the deductible, copayments
and coinsurance. The total you spend out of pocket in a year is limited, and
that maximum is also listed in your plan information. In general, the lower
your premium, the higher your out-of-pocket costs.
Cost-sharing options vary, so your goal is to narrow down choices based on
out-of-pocket costs. A plan that pays a higher portion of your medical costs,
but has higher monthly premiums, is better if:
- You see a doctor, whether a primary physician or a specialist, frequently.
- You frequently need emergency care.
- You take expensive or brand-name medications on a regular basis.
- You are expecting a baby, plan to have a baby, or have small children.
- You have a planned surgery coming up.
- You’ve recently been diagnosed with a chronic condition such as diabetes or cancer.
A plan with higher out-of-pocket costs and lower monthly premiums is the
financially smart choice if:
- You can’t afford the higher monthly premiums for a plan with lower out-of-pocket costs.
- You are in good health and rarely see a doctor.
Step 5: Compare benefits
By now, you likely have your options narrowed down to just a few. To
further winnow down, go back to that summary of benefits to see which plans
cover a wider scope of services. Some may have better coverage for things like
physical therapy or mental health care, while others might have better
emergency coverage.
If you skip this quick but important step, you could miss out on a plan
that’s much better tailored to you and your family.
Once you’re down to a couple of options, it’s time to address any
lingering questions. In some cases, only speaking with a person will do,
so call the customer service line of the insurers you’re considering.
Write your questions down ahead of time, and have a pen or computer handy
to record the answers.
Your questions will be based on your current health situation, but here are
some examples of what you could ask:
- I take a certain medication. How is that covered under this plan?
- Which drugs for this disease are covered under this plan?
- What maternity services are covered?
- What happens if I get sick when traveling abroad?
- How do I get started signing up, and what documents will I need?
A final tip: Don’t forget to discontinue your old plan before the new one
starts if you switch.
Checklist: Choosing a health
insurance plan
Here’s a quick checklist that summarizes the steps above:
- Go to your marketplace and view your plan options side by side.
- Decide which type of plan — HMO, PPO, EPO, or POS — is best for you and your family.
- Eliminate plans that exclude your doctor or any local doctors in the provider network.
- Determine whether you want more health coverage and higher premiums, or lower premiums and higher-out-of-pocket costs.
- Make sure any plan you choose will pay for your regular and necessary care, like prescriptions and specialists.
