A Guide to Choosing the Best Health Insurance Plan

FT Contributor
A notebook labeled "insurance plans" sits next to other loose documents, pens, eyeglasses, and a calculator.
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Whether you’ve just landed a new job or are navigating open enrollment, choosing a healthcare plan can be stressful at the best of times. These worries and fears may be exacerbated if you’re dealing with chronic illness or are struggling to be able to afford healthcare at all.

Many healthcare plans use jargon and foreign terminology that isn’t familiar to the average person, and it can be confusing to understand just what services are being offered. If you’re looking for a new health insurance plan or are deciding between plans, it’s important to be informed in order to make a decision that works best for you.

Factor in Your Personal Health

Your personal health will largely determine whether you need care for chronic illnesses, ongoing medication, mental health services, or other issues. These considerations can drastically affect the type of plan you’ll need, as well as the cost.

In general, individuals with infrequent medical needs are often better served by choosing a plan with a lower premium (the amount you pay each month), while individuals with frequent, ongoing medical needs are better served by choosing a plan with a lower deductible (the initial amount you pay out of pocket for services).

It’s also a good idea to do your research and make sure that all of the plans you may be considering cover any treatments or services you know you’ll need, including particular medications, doctors, or specialists within network.

Does It Fit Into Your Budget?

Even though in many cases insurance payments come directly out of your paycheck, it’s still important to make sure they fit your budget. If you think you might be paying too much for health insurance, it’s a good idea to look into just how much is being taken out of your salary each pay period.

If you’re an hourly employee, you may also need a lower-cost health insurance option if you don’t work full time. Healthcare is one of the most significant employee benefits, so it may be worth negotiating for better healthcare plans or coverage.

If you’re purchasing health insurance through the Affordable Care Act’s health insurance exchange, it can be daunting to pay an additional expense each month out of pocket. It’s a good idea to shop around for affordable plans that still offer the best value for your individual circumstances. If you have a low income, you may also be eligible for tax credits that make health insurance more affordable.

Consider Out-of-Pocket Expenses

Out-of-pocket expenses usually consist of deductible, copayments, and coinsurance.

  • Your deductible is the amount you are responsible for paying before your health insurance begins to pay.
  • A copayment is a fixed amount you pay for healthcare coverage after you’ve reached your deductible.
  • Coinsurance is the percentage of the cost you pay for a given healthcare service after you’ve met your deductible.
  • A premium is the monthly payment you make for health insurance, regardless of what healthcare services you’ve used.

In general, plans with lower deductibles have high premiums, while plans with high deductibles have low premiums. Plans with higher out-of-pocket expenses but low premiums are good for those who rarely need medical care, while plans with low out-of-pocket expenses and high premiums are good for those who have frequent doctor’s visits or other medical needs.

Choose Benefits That Fit Your Lifestyle

When choosing a health insurance plan, it’s important to choose benefits that fit your lifestyle. You should check to see if any medications you take are covered, as well as other services such as maternity care, physical therapy, fertility treatments, and mental health care. Not all plans cover all services, so it’s always a good idea to double-check that the healthcare services you’ll need throughout the year are covered.

Choose a Plan That Includes Your Doctor

Costs are usually much lower when you see in-network doctors as opposed to doctors who are out of network. When choosing a healthcare plan, make sure to look for plans where your primary care provider is covered, if you have one. If you’re comfortable changing doctors or if you don’t have a current primary care provider, feel free to look for plans that have good coverage in your area.

Skip Health Insurance Altogether

Since there is no longer a tax penalty on those who don’t have health insurance, skipping health insurance is now a viable option. If you’re a single, young, healthy person and don’t foresee any major health conditions in the future, you may be considering forgoing health insurance.

If you just need the most basic healthcare services or find yourself unable to afford better health insurance, there are a variety of free, affordable, or sliding scale clinics in many areas, including Planned Parenthood, nonprofits, as well as training and educational centers that offer low-cost services.

While skipping health insurance may save you some money, it does come with significant risks. Even if you’re healthy at the moment, it’s difficult to predict when you might develop an illness or become injured. If you get the flu or break a leg and don’t have health insurance, your medical bills can quickly skyrocket. Going without health insurance is a risky proposition that may limit your ability to receive adequate medical care going forward.

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