Health insurance coverage offers a safety net for peace of mind, but choosing the right plan can feel complicated. Luckily, with just a few helpful tips, you’ll be able to understand and compare plans more easily.
Whether you’re buying coverage for the first time or searching for a better plan, here’s what you need to know about finding the best health insurance coverage for your needs.
Understanding the Lingo: The Basics of Health Insurance Benefits
The fine print of a health insurance plan can be complex—and even downright confusing. Still, understanding those key terms is important, since they factor into the coverage you receive and the amount you’ll pay for that protection. Here’s a closer look at the most important ones.
Premium: Similar to auto insurance, this is the upfront rate you pay for coverage each month, even if you never make a claim.
Deductible: This refers to the total amount you must pay for health care services before your insurer begins to contribute. Deductibles are annual, which means you start from scratch on January 1 of each year.
Co-payment: This is the flat amount you pay for specific services, visits, or medication, even if you’ve reached your deductible.
Co-insurance: Afteryour deductible has been met, the portion of your medical costs you must pay is called co-insurance. Unlike a co-pay, which is a flat amount, coinsurance is a percentage.
Out-of-pocket maximum: This is the most you’ll be required to pay for covered health services in a single year—including your deductible, your copay, and your coinsurance.
Subsidy: This government incentive helps lower the cost of your health insurance each month. The Affordable Care Act (also known as Obamacare) provides three types of subsidies: advance premium tax credits, cost-sharing reductions, and Medicaid.
Enrolling for Health Insurance: How to Shop for Your Policy
Most people in the US get their health insurance through their employers. If your employer offers coverage, you’ll enroll directly through them. If you’re purchasing your own coverage, either because your employer doesn’t offer health insurance or because you prefer an alternative plan to what they offer, there are a few ways to do so:
Use the Government’s Health Insurance Marketplace (also known as the health insurance “exchange”): In 2010, the federal government created an online health insurance marketplace to make healthcare more affordable for everyone by lowering costs for those who can’t afford them. To enroll in Obamacare, simply head to the marketplace and enter your zip code during open enrollment (see below for specific dates). From there, you’ll be sent to your state’s health insurance exchange if one has been created for your state. Otherwise, you’ll continue using the federal marketplace exchange.
Depending on your income and your eligibility for other health insurance coverage, you may qualify for subsidies—also called premium tax credits—that will lower the cost of health insurance for you and your family. These are available for eligible members at both the state and federal health insurance exchanges.
Important: If you don’t purchase Marketplace health insurance during the open enrollment period, you will not be able to purchase ACA-subsidized coverage until the following year. Open enrollment dates are typically November 1 through December 15, with coverage starting on January 1. However, the federal government has declared a Special Enrollment Period (SEP) this year, extending the Healthcare Marketplace deadline to August 15, 2021.
Some states with their own ACA exchanges have extended their open enrollment periods. You can find those dates here.
The only exceptions to missing the open enrollment deadline is if you experience a life event that qualifies for a Special Enrollment Period.
Buy Through an Online Health Insurance Brokerage (private exchange): Also known as online health insurance brokerage, a private exchange helps you compare health insurance plans to ensure you find the best policy for your needs. Comparison shopping can help you get the most affordable rates, but a private exchange may not be able to show you every plan in the market that meets your requirements. You also won’t benefit from premium tax credits (subsidies) if you buy your health insurance policy through a private exchange rather than the Marketplace.
Enroll Directly With an Insurer: The Health Insurance Marketplace does not include every health insurance plan available. That’s why some people might be able to find a plan that better meets their coverage needs or their budget outside the marketplace. If you decide to shop for a health insurance plan directly from an insurance company, make sure to compare the plans from several providers, since each one will have different policy options.
Which Health Care Plan Is Right for You?
Now that you understand the common health insurance terms and how enrollment works, it’s time to find the type of plan that will best suit your needs.The policy you choose will help determine your out-of-pocket costs, as well as which providers you can see. While comparing plans, you’ll want to look for a summary of benefits and cost. You should also check to see if your preferred doctors and clinics participate in your plan’s network. Here are the most common health insurance plans:
HMO (a budget-friendly plan): A Health Maintenance Organization (HMO) plan is one of the most affordable types of health insurance, offering low premiums and deductibles, as well as fixed copays for doctor visits. An HMO policy requires you to choose doctors within their network, and you’ll need a referral from your primary care physician before you can see a specialist, such as an allergist or cardiologist. HMOs are a wise option choice if you’re on a tight budget and don’t have many medical issues.
POS(an affordable plan with out-of-network coverage): A Point of Service (POS) plan is similar to an HMO policy because you’ll need a referral from your primary care physician (PCP) before seeing a specialist. However, in exchange for a slightly higher premium, you’ll also have access to out-of-network doctors and hospitals. If you’re dealing with a chronic condition and one or more of your doctors are not in network, a POS may be right for you.
EPO (the convenience of a larger network): Like HMOs, Exclusive Provider Organizations only cover in-network care. However, their biggest draw is that they offer a larger network overall. EPO premiums are higher than those of HMO plans, but lower than those of PPOs.
PPO (offers the most freedom): A step up from all three, a Preferred Provider Organization gives its members the most flexibility. If you see specialists frequently or want to have fewer restrictions on out-of-network providers, this is the plan for you.
Affordable Health Insurance Premiums Are Just a Click Away
Keeping your monthly premiums low starts with finding the best possible coverage rates—and we’ve done all the work for you. Thanks to our quick and easy online insurance quotes, you can choose a plan and get your coverage in just minutes. Get your free quote today and find out how much you can save every month!