4 Questions to Help You Choose a Health Insurance Plan
Compare health plans, coverage and costs during open enrollment
Compare health plans, coverage and costs during open enrollment
Open enrollment is the time to enroll, renew or change your health plan. It typically occurs in the fall and allows you to review your coverage and make changes based on medical or financial needs.
Choosing the right plan can feel overwhelming, but knowing the answers to these four key questions can help.
1. Who is paying for your insurance?
Health insurance can be provided by an employer, a government program or purchased on your own.
Each insurance provider offers different plans, with varying levels of coverage and provider networks.
Employer sponsored plans: Most people get health insurance from their job or their spouse’s job. Employees choose from plans offered by their employers.
Employers set enrollment periods, usually in the fall. Benefits start in the new year. If you want to make changes to your plan or switch to a new one, this is the time to look at your options.
You can also make changes after certain life events, including marriage, having a baby, moving, job changes or losing coverage.
When you start a new job with health insurance, you usually have a special enrollment period. This period lasts 30 to 90 days from your start date. During this time, you can sign up for health benefits. This is different from the annual open enrollment period.
Self-employed or individual coverage: If you don’t have job insurance or are self-employed, you can buy your own insurance. You can get health insurance from private companies or through a health insurance marketplace or exchange.
In California, Covered California lets you compare and purchase health plans. Open enrollment is from Nov. 1 to Jan. 31.
You may qualify for financial assistance based on your income and lower your insurance costs.
Medicare: If you are 65 or older, you can get insurance through Medicare. You can sign up for a plan or change your current one. Open enrollment occurs annually from Oct. 15 to Dec. 7.
2. What kind of health plan do you need?
Consider your health needs and budget when choosing a health insurance plan. Most plans fit into one of three categories.
Health Maintenance Organization (HMO) plans require you to use doctors and hospitals from a specific list called the “network.” Your costs are lower when you visit an “in-network” provider. If you go to one outside the network, your care may not be covered. You might have to pay the entire bill unless it is an emergency.
Your primary care doctor must refer you to specialists or other services. This is required for the HMO to cover those costs.
Exclusive Provider Organization (EPO) plans are similar to HMOs. However, you might not need a referral from your primary care provider to see a specialist.
Preferred Provider Organization (PPO) plans have a network of doctors and hospitals. If you visit a doctor or hospital outside the network, your PPO may help with some of the costs. However, it will not cover as much as if you stay in the network. You do not need a referral from your primary care doctor to see a specialist.
PPO plans offer more choices of doctors and hospitals than HMO plans, but they also cost more.
HMO, EPO and PPO plans can vary a lot. It is important to review the details of each plan carefully.
3. What type of health care services do you need?
When picking a health insurance plan, consider your health needs. Do you have a chronic condition like diabetes? If yes, choose a plan that covers check-ups, medication and maybe specialist care.
Consider your lifestyle as well. If you are active and healthy, you may need less coverage. However, if you are at risk for health issues, you may need more coverage.
4. What are the full costs?
Consider how health insurance costs impact your budget and access to medical care. It’s important to understand the full range of expenses including:
Premium: This is the amount you pay each month for your coverage. Plans with lower premiums may cost less at first, but they often have higher out-of-pocket costs.
Deductible: This is the amount you pay before your insurance starts covering services. Usually, plans with higher premiums have lower deductibles, and the reverse is also true.
Co-pay: This is a fixed fee you pay for some services, like doctor visits or prescriptions. For instance, you might pay $35 for a doctor’s visit, even if you haven’t met your deductible.
Coinsurance: This is when you and your insurance share costs. For example, after you meet your deductible, your plan may pay 80% of a hospital bill and you pay the other 20%.