Finding the Right Health Insurance
Advertiser Disclosure: Our first priority is to provide valuable information to help our readers gain insight into financial topics. Although we receive compensation from some of the brands listed on our site, we only highlight companies we believe can benefit our readers and their financial situations.
Choosing a health insurance plan is like solving a puzzle without knowing what it’s supposed to look like. You might solve it correctly in the end – or you might mess it up and have to start all over.
And even though it seems impossible to sort through all the various options, there are ways to pick the right healthcare plan for you and your family.
Keep reading to see how we break down health insurance, where to buy it and how to find the best plan for you.
How to Access Health Insurance
Most people get health insurance from one of the following options:
- Their employers
- Through the Healthcare Marketplace (varies by state)
- Through Medicare, Medicaid or another government-based program
The HealthCare Marketplace, commonly referred to as “Obamacare,” is the government program that connects individuals with health insurance providers. Some states offer more provider options than others, so your experience may vary compared to a friend in a different state.
Right now, you can have an income up to 400% of the federal poverty guidelines for your household size and still qualify for (often significant) government subsidies.
For many consumers, coverage through their employer will be less expensive than Marketplace options. Also, you will usually not be eligible for any government subsidies if you are offered health insurance through your employer.
Many people also get their health insurance through their spouse or domestic partner. If it’s open enrollment season for both of you, compare plans and plan prices to see if you should register for one plan together or pick separate options.
What to Look for in a Health Insurance Plan
Prescription Coverage
If you take a certain medication that doesn’t have a commonly available generic, make sure that it is covered when you’re shopping around different insurance policies. You might be surprised at how different drug costs may be depending on the insurance provider and level of coverage.
If you find a policy you like but your pricey drug isn’t covered, see how much it will cost out of pocket with sites like Cost Plus Drugs or GoodRx. It may be worth it to pay for the medicine out of pocket instead of finding a plan that will cover it.
In-Network Doctors and Hospitals
Every insurance policy has its own rules on which doctors, facilities and hospitals are in and out of network. If you already have a provider you trust, make sure that your new insurance company will cover them.
Don’t call the provider directly and ask if they accept that insurance: contact the insurance company directly or look at the directory available through your account. Sometimes a doctor’s office may have the wrong information regarding what insurance policies they accept.
How to Compare Insurance Plans
Types of Insurance Plans
There are four main kinds of health insurance plans:
- PPO: With a PPO, you will still have a network of doctors and hospitals, but you can receive some coverage outside of your network. You do not need a referral to see a specialist.
- EPO: An EPO is like a hybrid between a PPO and an HMO. You will likely get coverage only within the plan’s network, but you may not need a referral to see a specialist.
- HMO: With an HMO plan, you often need to get a referral from a primary care physician before seeing a specialist. If you see an out-of-network provider, the insurance company will usually not cover any expenses unless it’s an emergency.
- POS: With this plan, you must choose a primary care doctor who will facilitate care with any specialists you want to see. Out-of-network doctors may still be covered, but at a lower rate, potentially leaving you with a larger bill.
Premiums vs. Deductibles
There are three main financial factors to examine to compare different insurance plans:
- Monthly premium: This is the amount you’ll pay every month and will stay the same for the entire policy duration.
- Deductible: This is the amount you must pay before insurance will cover most covered expenses.
- Max out-of-pocket: This is the maximum amount you can pay in a year, including your deductible.
Like with other types of insurance, premiums for health insurance generally depend on the level of coverage. The greater the coverage, the higher the premium. If you see a plan with a low premium, the deductible will usually be high and vice versa.
HSA Eligibility
A Health Savings Account (HSA) is a tax-advantaged account with three types of tax benefits: contributions are tax-deductible and earnings and withdrawals are both tax-deferred.
Plus, you can even invest money in an HSA just like you would in a regular retirement account. Once you’re 65 or older, you can withdraw the contributions penalty-free, similar to a traditional IRA or 401k.
However, you are only eligible for an HSA if you have a high deductible health plan. These plans are best suited for consumers who have few health problems and relatively low medical bills.
Health Insurance FAQs
Should I Look Into a Health Share Ministry?
A health share ministry is like a co-op for health insurance. A group of people sign up for a health share ministry, pay a premium every month and use those funds to pay out healthcare claims.
But health share ministries are not under the same rules as traditional health insurance. The biggest drawback is that healthcare ministries are not required to cover pre-existing conditions. Also, some require that you pay the bill upfront and wait to be reimbursed. If your claim is denied, then you’re on the hook for the full cost of care.
Some healthshare ministries are also based on certain religious beliefs that may prohibit coverage for birth control and other related expenses.
When Can I Change My Insurance Policy?
Unlike other types of insurance, which you can change at your discretion, health insurance has set times when you can pick a new policy. This is known as open enrollment, which usually happens in the late fall or early winter. For example, open enrollment for the Healthcare Marketplace is between November 1 and December 15.
However, you may qualify for an exception if you have had one of the following qualifying life events:
- Losing health coverage because of a job loss, being kicked off your parent’s plan (for example, due to aging out) or any other reason
- Getting married
- Having a baby (via birth or adoption)
- Moving to a different zip code
Sign Up To Gain Insight On Other Financial Topics
