How to Pick a Health Insurance Plan for 2019
December 21, 2018
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If you’ve put off getting health insurance, or always just choose the cheapest option your employer offers, you may be putting yourself at risk. Medical expenses are the leading cause of bankruptcy. A single emergency — such as a broken arm or hospital visit — can cost you thousands. Good health insurance provides an essential safeguard against these unexpected expenses.
Whether you get insurance through your employer or through the Health Insurance Marketplace on Healthcare.gov, it’s important to understand how insurance works before choosing a health insurance plan for 2019.
Below are five common health insurance questions and answers that will help you choose the right plan for you.
1. What is a deductible?
The term “deductible” is regularly thrown around when people talk about insurance, but you may not know what it means.
Your deductible is how much you have to pay out of your own pocket before the insurance company starts covering your care.
A low-deductible plan — where your insurance company picks up the cost right away — will be far more expensive than a higher deductible plan. But if you have regular healthcare expenses, such as an ongoing health condition that needs regular doctor visits or medication, the tradeoff can be worth it.
If you’re relatively healthy and don’t need to see the doctor often, a high-deductible plan may make more financial sense for you.
2. What is a premium?
Your premium is how much you pay each month to have health insurance. You owe that money each month, even if you don’t use your insurance during that time frame. It’s a set monthly expense, just like your cell phone bill or rent.
If you’re on a budget and are healthy, a low-deductible plan will likely have the lowest monthly premium for you. But if you need regular medical attention, it may be more cost effective to opt for a plan with a lower deductible and a higher monthly premium.
3. What are bronze, silver, gold, and platinum plans?
Insurance companies label their plans bronze, silver, gold, or platinum. The different tiers don’t reflect the kind of care you’ll receive; you can get excellent care on all four.
However, the tiers reflect the plan’s cost. A bronze plan tends to be a high-deductible, low-cost plan, while a platinum plan will be a low-deductible plan with a high premium.
4. What’s the difference between PPO and HMO?
Two of the most common insurance networks are HMOs and PPOs. These terms refer to the network of doctors you can visit and get insurance coverage.
An HMO tends to be cheaper than a PPO, but there are some drawbacks. You can only visit doctors within your network. If you see a doctor that isn’t part of your HMO, your insurance won’t cover any part of your visit.
Plus, if you need to see a specialist, you need to get a referral from your general practitioner first. That means you’ll need to make an appointment and pay your doctor a copay just to get the name of a specialist.
PPOs give you more freedom, but they tend to be more expensive. But, if you need to see specialists or want to have more options in what professionals you see, a PPO can be a smart choice.
5. What medications do you need covered?
One of the most commonly overlooked factors when choosing a health plan is what medications you’re on. In some cases, one plan will cover your medications, while another won’t, leaving you to pick up the bill if you choose the wrong plan. Depending on your medications, you could have to pay hundreds out of pocket each month to pay for your drugs.
To avoid that problem from happening, make sure you check the plan’s formulary. The formulary is a list of covered medications. You can contact the insurance company and request a copy of the formulary for each health plan you’re considering, or some companies allow you to check if your medications are covered online.
Picking a health insurance plan
While choosing a health insurance plan may seem intimidating, once you understand the fundamentals, it’s not that difficult. Take the time to review your options carefully and choose the plan that works best for your medical and financial situation to ultimately save money.
If your employer doesn’t offer coverage or if you’re self-employed, you can sign up for insurance through companies like Esurance®, eHealth Insurance, or Healthcare.gov.