How to Choose a Health Insurance Plan: 4 Questions to Ask
What to consider before choosing health insurance coverage
What to consider before choosing health insurance coverage
Key Takeaways
- Compare your health insurance options.
- Check provider networks and referral rules.
- Make sure your doctors and hospitals are in-network.
- Consider your expected healthcare needs.
- Review prescription drug coverage before enrolling.
- Compare premiums and out-of-pocket costs.
Choosing health insurance can feel overwhelming, especially when you’re sorting through different plan types, provider networks and costs.
Before you choose a health plan, start with a few simple questions:
- Where will you get your coverage?
- How much flexibility do you want when choosing doctors?
- What type of care do you expect to need?
- How much are you comfortable paying each month and when you get care?
Thinking through these questions can help you focus on what matters most and make it easier to choose a plan that fits your needs.
“When comparing health plans, don’t focus on the monthly premium alone. Think about the overall value of the plan, including your costs, access to care and whether it supports your healthcare needs,” says Anil Keswani, MD, corporate senior vice president and chief medical and operations officer for ambulatory care at Scripps Health.
1. Where will you get your health insurance?
Your health insurance may come from an employer, the Health Insurance Marketplace or Medicare. If you’re changing coverage because of a new job, retirement or another life event, your options may look different than they do now.
Common sources of coverage include:
Employer-sponsored health insurance: Many people get health insurance through their employer or a spouse’s employer. Employers decide which plans to offer and may pay part of the monthly premium.
Individual or Marketplace coverage: If you don’t have coverage through an employer, you may be able to buy a plan directly from an insurance company or through the Health Insurance Marketplace. In California, individual and family plans are available through Covered California.
Medicare: Medicare is federal health insurance mainly for people 65 and older. Some younger people with certain disabilities or medical conditions may also qualify.
If your coverage is changing, look closely at costs, provider networks, benefits and prescription drug coverage before choosing a new plan.
2. How much flexibility do you want when choosing doctors?
Health plans differ in their provider networks, which can affect which doctors you can see, whether you need referrals and how much you pay.
Common plan types include:
Health maintenance organization (HMO): An HMO generally requires you to use in-network doctors and hospitals. You typically choose a primary care physician and may need a referral to see a specialist.
Preferred provider organization (PPO): A PPO generally offers more flexibility. You usually don’t need referrals and may be able to receive out-of-network care, though it often costs more.
Exclusive provider organization (EPO): An EPO generally requires you to use in-network providers but may not require referrals to see a specialist.
Federal protections generally allow you to get emergency care at an out-of-network emergency room without prior approval or higher copayments or coinsurance. Other plan costs may still apply.
If keeping your current doctors or going to a preferred hospital is important to you, check that they participate in the plan before you enroll.
“Your provider network can have a significant impact on your experience with a health plan, especially if you already have doctors or specialists you trust,” Dr. Keswani says.
3. What type of healthcare do you expect to need?
Think about how you and your family usually use healthcare.
Do you see specialists regularly, take prescription medications or receive ongoing care for a chronic condition? These needs can help you decide which plan features matter most.
For example, if you see several specialists, you may want a broader provider network or fewer referral requirements. If you take medications regularly, prescription drug coverage may be especially important.
You can’t predict every medical need but thinking about how you use healthcare can make it easier to choose a plan that fits your needs.
4. How much are you comfortable paying for healthcare?
Think about both your monthly premium and what you may pay when you receive care.
A plan with a lower monthly premium may come with a higher deductible or other out-of-pocket expenses. A higher monthly premium may mean you pay less when you need care.
Consider how often you expect to use healthcare and how much you could comfortably pay for an unexpected medical expense. Looking at the full picture can help you choose a plan that fits your budget.
Choosing a health insurance plan
There is no single health plan that works best for everyone. The right choice depends on your healthcare needs, budget, preferred doctors and hospitals and how much flexibility you want.
“Taking the time to understand your options can help you choose coverage with greater confidence and avoid surprises when you need care,” Dr. Keswani says.
Keeping these priorities in mind can make it easier to compare your options and narrow down your choices.
If you’re choosing coverage during open enrollment, compare your plans side by side to see which one best meets your needs and budget.