Finding the Right Health Insurance Plan

Choosing the wrong health insurance plan can compromise consumers’ health and ruin their budgets. In extreme cases, it can even lead to serious debt.

Selecting the right plan can give consumers the confidence, freedom and coverage they need to maintain their physical wellbeing without destroying their financial health.

Despite the complexities of the market, determining which plan is best for a particular consumer’s needs does not have to be time-consuming or difficult. By starting with some simple questions and using the process of elimination, consumers can rapidly whittle down their options and make smart, informed decisions.

Consumers attempting to determine what type of insurance they need should begin by asking themselves whether they will need a family plan or an individual plan. Next, they should consider their health status and those of each member of the family who will be on their plans. Potential policy buyers should consider where they live, how much care they typically use in a year and what their priorities are when accessing health care.

How much care do you use and of what kind?

One of the primary factors consumers need to take into consideration is the amount of care they regularly access. Consumers who typically utilize a minimum of care have more flexibility than those who need medical services more often. The kind of care an individual or family seeks matters as well. Consumers who need specialist services, such as mental health care, should take careful note of that fact because it will significantly influence what type of plan is most desirable and cost-effective for their needs.

Another important factor to consider when tallying up the amounts and types of care a potential policyholder uses is how much self-direction he or she cares to take when it comes to health care. Consumers who are comfortable or accustomed to managing and directing their own care will need different types of plans than consumers who rely on their primary care provider to coordinate and manage their care for them. Policyholders will need to know how to find a health care provider who can serve as their primary care provider and, therefore, a gatekeeper of their coverage.

Lifestyle Considerations and Financial Concerns

When considering their health care options, consumers benefit from evaluating certain aspects of their lifestyles. For example, does the family or a member of the family travel often? Do they live in an area with limited access to medical providers and facilities or an area with an abundance of options in that respect? How much time is there to dedicate to medical appointments and paperwork? While some of these questions may seem superficial or unimportant, they can actually play a key role in determining which plan is most appropriate for a family.

When it comes to asking questions about finances and health insurance, many consumers ask the wrong questions. They fail to remember that health insurance costs come in different forms. Each form is assessed at a different time but contributes to the total cost of health care over time. The best plan for a household will balance cost spread over time, such as premiums, with costs incurred at the moment of care like copays and deductibles. They will also match those costs to the household’s cash flow for maximum security and minimum risk and strain.

Sorting Plans by Family Needs

Once individuals or households have taken the time to review their needs, situations and resources, they can begin narrowing down their options.

Health maintenance organization (HMO) insurance plans utilize provider networks to provide enrollees with cost-effective care. Policyholders must use in-network providers, except in the case of qualifying emergency care events. Primary care providers (PCP) coordinate and manage care, and referrals must be secured before enrollees can access specialist care. HMOs can feature high premiums in return for low out-of-pocket costs. HMOs are most appropriate for people who:

  • Are comfortable with or actively desire a designated PCP who serves as a coordinator and gatekeeper for all care.
  • Have the time, transportation and willingness to see their PCP first each time they need or want a referral to specialist care.
  • Are willing to accept in-network referrals for all their needs.
  • Prefer to pay regular and consistent higher monthly premiums in return for no or low-cost deductibles, copays and out-of-pocket expenses when they receive care.
  • Individuals or families who do not travel often or who do not expect to need non-emergency care when they are out of range of their plans’ provider networks.
  • Individuals with chronic or complex conditions.

Preferred provider organization (PPO) health insurance plans do not require that enrollees select a primary care provider. If patients do select PCPS, then those providers are not expected to serve as coordinators or gatekeepers to care. Referrals are not needed to make appointments with specialty providers. PPOs tend to have larger networks than HMOs. They will cover less of the cost of care when patients see out-of-network providers, but patients are free to select and see the providers of their choice. In return for this flexibility, PPOs often have fairly high premiums and high deductibles. PPOs are most appropriate for consumers who:

  • Prioritize the ability to manage their own care and select their own providers.
  • Do not need a PCP to coordinate their care.
  • Do not have or want to spend the extra time necessary to secure referrals before seeing specialist providers.
  • Already have one or more providers they wish to continue seeing who are not affiliated with a plan.
  • Are comfortable paying more both up front (through premiums) and at the time of care (deductibles) in order to receive the care they want, when they want it.
  • Individuals who do not have chronic or complex conditions.

Point of service (POS) health insurance requires enrollees to use a gatekeeper PCP from within their plans’ networks. PCP referrals are necessary before the plan will cover the cost of specialist services. Patients may see in or out-of-network specialists, although out-of-network provider services will cost more. POS plans are most appropriate for potential buyers who:

  • Travel frequently and expect to need to access care while outside the range of their plans’ network.
  • Have existing relationships with unaffiliated specialist service providers they wish to continue seeing.
  • Want flexibility in selecting providers but are willing or desire to have a PCP manage and coordinate their care.
  • Live in regions where provider options are limited.
  • Want lower monthly premiums than those offered by PPOs but are comfortable with modest deductibles and/or co-pays at the time of care.

Exclusive provider organization (EPO) plans typically do not require enrollees to have designated PCPs or to get referrals before seeing specialists. However, EPOs will not cover any portion of any costs incurred when a policyholder receives services from out-of-network providers. EPO plans are good options for individuals or families who:

  • Want to secure ACA-compliant health care with the lowest possible monthly premiums.
  • Do not access a large amount of care.
  • Do not want a designated PCP or to need to seek referrals for specialist services.
  • Are willing to work within their plans’ limited networks or to pay out-of-pocket for specific, out-of-network care they want.
  • Individuals who do not have chronic or complex conditions.

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