Choosing a health insurance plan may seem complicated, but once you know your options, it can be simple.
Whether you’re starting a new job or it’s open enrollment season at your current job, it’s important to make sure you get as much as you can from your health insurance plan. Even if you plan to stay in the same plan, you should still take the time to review a few things before you sign up again.
1. consider your family’s needs
If you’re married or have kids, think about what your family needs from a health care plan. Because coverage can change from year to year, it helps to know which plans work best for your circumstances. For example, if you and your spouse have significantly different health care needs, it may be beneficial to maintain separate plans with different levels of coverage or different prices.
2. take note of open enrollment
This is the eligible window to enroll in or change an insurance plan. If you’re buying health insurance through a government-run exchange, open enrollment typically begins in the fall and can vary by state. If your employer offers health insurance, open enrollment can take place any time of the year.
The open enrollment period is a good reminder to review your situation and make sure you and your family are getting everything you need from a health care plan.
3. review your coverage options
If you’re looking for individual or family insurance plans outside of an employer, consider how much coverage you need when selecting a plan.
Individual health insurance plans are often classified by the coverage they offer. In the health insurance market, for example, plans come in “metal” categories: platinum, gold, silver, and bronze, and “catastrophic” plans are also available to some people.
The categories only differ in how you and your plan split the costs, not in the quality of care.
4. see premiums, copays and deductibles
Insurance plans come with a number of out-of-pocket costs:
- You pay a premium for your coverage, regardless of the services you use.
- copayments, a flat fee for certain types of office visits, prescriptions or other types of care, are paid at the time of service.
- deductibles are costs you pay before your insurance kicks in.
- You may also pay coinsurance on certain services; for example, your insurance may cover 80%, leaving you responsible for the remaining 20%
- many plans also have out-of-pocket maximums: once you reach this number, your insurance will cover all costs.1
Out-of-pocket expenses can get complicated and affect your budget. take the time to consider what services you might need in the next year. then look at what costs might be associated with those services in each plan you’re considering.
5. check provider networks
Write down all the providers you think you or your family might use in the next year: doctors, specialists, and even specific hospitals, clinics, or pharmacies. during open enrollment, review each plan you’re considering to see if your preferences are included.2
Please note that medical professionals and insurance companies continually update their contracts. Doctors or other professionals who were in network last year may be out of network next year.
6. consider hsas and fsas
Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAS) allow you to set aside pre-tax dollars to pay for eligible health care expenses, such as copays, certain prescriptions, and some medical equipment. however, these plans are not available to everyone. HSAS require enrollment in a high-deductible health plan (HDHP) or catastrophic plan, and FSAS are only offered through employers (not available from all employers).
if you plan to use an hsa or fsa, check the contribution limits and rollover policy. It’s also a good idea to confirm that these accounts cover the types of medical expenses you anticipate for the coming year.3
7. note the difference between hmos and ppos
with health maintenance organizations (hmos), you are generally only covered if you see doctors within the hmo network. On the other hand, preferred provider organizations (PPOS) often provide some coverage for out-of-network services. hmo networks tend to be smaller and you will likely need to name a primary care doctor who will refer you to the necessary specialists.
These plans also typically have lower premiums and deductibles. ppos often have wider networks and don’t require referrals, but they tend to be more expensive.
8. make sure your medications are covered
Create a list of your medications and note if you take brand-name or generic prescription drugs. Brand name or patent medications can be expensive, so finding a policy that covers them is essential. generic drugs generally cost less, so if your prescriptions are mostly generic, you may be able to cast a wider net or feel more comfortable paying out of pocket.4
Call your insurance provider to find out if the plan you’re considering covers the drugs on their list. Be sure to ask about copays for prescriptions and refills.
Health insurance isn’t the only type of insurance you should review every year. read our annual insurance review checklist for more information.