When you’re young, single, and living a life of freedom, health insurance may be the last thing you care to add to your list of expenses. However, when you’ve settled down and started a family, priorities are quick to change.
Now, caring for the well-being of every family member is essential. You might start eating better, working out, or making time to spend with the kids at home. However, you can’t plan for every eventuality. That’s why you need health insurance.
Even though we know why it’s such a necessary expense, many of us are still confused about what the ‘best health insurance plan’ would offer. A lower premium might be appealing, but the service may not cover all the services you need. On the other hand, opting for expensive, comprehensive coverage might include many items you don’t need.
There’s a lot you should consider, from benefits to flexibility and costs, before choosing the best health insurance plan for your family. Here are three ways you can get the most out of your policy.
1. Consider Type and Coverage
When you start researching different health insurance plans, you’ll soon start feeling like you’re drowning in alphabet soup. There are various common types of policies, including:
- Health Maintenance Organization (HMOs)
- Preferred Provider Organization (PPOs)
- Point of Service Plan (POS)
- Exclusive Provider Organization (EPOs)
Each one comes with pros and cons, from costs to service availability.
For example, an HMO will insist that you stay within its approved network of healthcare providers. If you need a specialist, you can only make an appointment if you’ve been given a referral. You’ll have lower out-of-pocket costs but much less leeway to choose doctors.
On the other hand, a PPO will allow you a lot more freedom of choice. However, staying in the network is a lot less expensive. Going outside of it will mean higher out-of-pocket fees.
2. Out-Of-Pocket Costs and Deductibles
Before you start spending significant amounts of money on health insurance, you need to check what your out-of-pocket costs, like deductible fees, will be. It’s essential to understand the terms and what they mean for your bank account.
It’s also essential to understand the differences between coinsurance and copayment and where deductibles fit in.
Deductibles
Most health insurance plans have a deductible, but very few people truly understand how they work. The term applies to a certain amount you need to pay towards your healthcare costs every year before your insurance kicks in.
For example, let’s say you have an annual deductible of $800. In January, you need to pay for a doctor’s visit and a prescription. You need to cover the full amount of $200, while your provider doesn’t pay anything.
In March, you need to go for a biopsy after discovering a suspicious lump. Although it turns out as benign, you still must cover $3,500 in bills. First, you’ll have to pay $600 to cover the rest of your annual deductible. You’ll also have to cover any required copayments or coinsurance costs. Your health insurance will handle the rest of your bill.
After this point, you’ll only have to pay any applicable copayments or coinsurance costs. However, once you’ve hit your policy’s maximum out-of-pocket limit, the insurance will cover all other bills in full.
Different types of health insurance deductibles include:
- Annual: The most common type of deductible and the one used in our example.
- Per-Episode: Your insurer may require you to meet a certain amount every time you’re hospitalized.
- Prescription: Instead of having just one annual deductible, you’ll have a separate requirement for pharmacy prescriptions.
- Family: These work differently than those for individuals and function like aggregate deductibles.
Exceptions
Some services won’t require you to pay an amount if you’re on a high-deductible health plan. These include, but aren’t limited to:
- Blood pressure screening
- Depression screening
- HIV screening
- STI prevention counseling
- Syphilis screening
- Immunization vaccines
- Cholesterol screening
- Obesity counseling
There are a few other conditions that qualify under the Affordable Care Act, so always make sure to research your opportunities when comparing health insurance plans.
Copayment Plan
If you’re on a copayment plan, you’ll need to pay a set flat rate every time you need healthcare services. However, this fee only becomes applicable once you’ve met your deductible.
For example, let’s say your deductible was $300, and you’re on a copayment plan with a flat rate fee of $30. The next time you visit your doctor or get medical treatment, you’ll only need to pay $30, while the insurance provider covers any additional costs.
There are a few other terms that might apply. Depending on the type of plan you have, additional conditions that may affect your fees could include:
- Having to stay within the insurance provider’s healthcare network.
- A maximum out-of-pocket limit.
- Variable copayment amounts and tiers depending on bill totals.
The most significant advantage of getting a copayment plan is that you’ll never be surprised by the amount for which you’re responsible.
Coinsurance Plan
As with copayment policies, you’ll need to pay a certain fee once you’ve met your deductible. However, coinsurance plans generally work on percentages rather than a flat rate.
For example, let’s say you have a deductible of $500, and your coinsurance terms are 80/20.
If you receive a bill for $1,000, you’ll need to pay enough to meet your deductible. That’ll leave a remaining outstanding amount of $500. You’ll need to pay an additional 20% or $100 before your insurance provider covers the remaining $400.
Since coinsurance works on percentages, you can’t always calculate your part of a medical bill upfront. For example, you get an estimate for $5,000 on a surgery. However, during the procedure, the surgeon encounters a problem that needs urgent attention.
Now your bill stands at $8,000 rather than the original estimate amount. Instead of paying $1,000, you’ll now need to fork out $1,600.
Thankfully, maximum out-of-pocket limits mean that this doesn’t scale indefinitely.
Maximum Out-of-Pocket Limit
Once you’ve reached your deductible, you’ll either start paying coinsurance or copayment amounts. However, healthcare plans will usually have a maximum out-of-pocket limit. Once you’ve reached the threshold, the provider will pay for all future medical bills. You won’t be required to contribute towards any costs aside from your monthly premium.
There are a few obvious exceptions. If you require a service that’s not covered by your medical plan, you’ll still need to cover the bills yourself. If you’re on expensive medication for chronic conditions or receive frequent and recurring therapy sessions, you might benefit from having a plan with a lower limit.
You’ll have to pay a higher premium to offset the benefit, but if you’re likely to hit your limit early every year, the advantages will far outweigh the disadvantages.
3. Compare Policy Benefits
You should have your options narrowed down by this point. Now it’s time to compare the different policy benefits you’ll receive to see which one offers the broadest scope of services.
Keep any specialist treatments you might need in mind. For example, if you need fertility treatments, physical and recovery therapy, or mental care, you need to look for a plan covering these. You might also need specific services for your kids. Skipping this step means that you could end up with a policy that’s ill-suited to your family.
If you’re unsure whether a particular therapy or medicine is covered, contact the agency’s customer service or broker’s office. It’s vital that you understand precisely what you’re getting in return for your premium and that it meets all your needs.
Don’t be afraid to ask questions such as:
- Does this plan cover my chronic medication/therapy?
- Is maternity care included?
- Are there options for emergency medical care if I’m traveling abroad?
Also, remember to ask your insurer if they include perks for healthy living. For example, some providers may give discounts or incentives if you wear fitness trackers or visit the gym regularly. Every penny you get back through these programs is a penny saved.
Choose Wisely
If you’re looking for the best possible health insurance plan for your family, you might have to hunt around a little. It’s a good idea to compare various policies to see which ones offer you the best combination of features.
First, take care to choose the type of plan that provides the coverage you need. If you need specialists or recurring therapy, make sure to address this with your broker or insurance agency.
Also, remember to find a balance between costs, deductibles, and limits. If you have chronic conditions or require expensive medication, consider selecting a plan with a higher premium and a lower out-of-pocket limit.
Finally, get clarification on any benefits or additional perks. It’ll save you money in the long term. If you consider all these factors, you’ll be able to choose the best possible health insurance plan for your family.
