Maybe you just turned 26 and you’ve been kicked off your parents health insurance plan. You now have to figure it out all for yourself. Maybe you are 45, venturing off on your own to start a business and finally pursue your passion, but you need to find an affordable health insurance plan for you and your family. Or, maybe you’ve unfortunately found yourself in the position many of us do at some point in our lives where you’ve lost your job and have no idea how to go about getting on your own health insurance. You’ve heard multiple things from multiple sources, and it has left you feeling confused about what to look for, how much you should be paying and what the different types of health insurance plans are.
That is why I have written this article — to help start you on your path to finding the right health insurance plan for you.
There are however some things you need to know before you actually begin your research.
Affordable Care Act Requirements
First, when looking into health insurance, it is important whatever plan you choose meets the requirements of the Affordable Care Act, a national piece of legislation that attempts to ensure every American has quality healthcare. Most people have come to refer to the Affordable Care Act as “Obamacare.” It is essential the plan you choose meets the requirements of the law because, if it doesn’t, you will still be required to pay the yearly fine those without healthcare are subject to. An example of a plan that would not meet the “minimum essential coverage” required would be a plan that only offers you discounts on medical services or a plan that only offers coverage for a specific disease or condition.
One change and major benefit the Affordable Care Act made was to ban health insurance providers from denying people coverage based upon pre-existing conditions they may have. A pre-existing condition is a health problem you have before your health insurance coverage begins.
You may be thinking, “I am healthy and don’t have any chronic conditions so why should I care about this provision of the law?” The answer is because you never know what might happen down the road. For example, someone may have health insurance through their employer and develop cancer. They may get treatment that sends the cancer into remission but lose their job at some point in the future. Should they have difficulty obtaining a new job and need to obtain their own health insurance coverage, before Obamacare was passed, insurance companies could have denied them coverage based upon the fact that they had a pre-existing condition. Thanks to the Affordable Care Act, if you have a pre-existing condition now, you do not have to worry about being denied coverage in your search for health insurance.
Open Enrollment Period
Second, you need to make sure you enroll during the open enrollment period, which occurs November 1st through January 31st. This is because this is the period of time set aside each year when health insurance agencies are required by law to accept new clients, regardless of medical history. If you fail to enroll during this time period, you risk not being able to obtain health insurance for an entire year.
The only exception would be if you qualify for a Special Enrollment Period. You can qualify if you’ve had certain life events, such as losing your health coverage, changing your job, moving, getting married, having a baby, or undergoing other similar types of circumstances.
Use Multiple Market Places
Third, use multiple market places when searching for coverage. It is a mistake to only use one because you could be missing out on a great deal. Additionally, do not feel obligated to only search government sites like HealthCare.gov. While you can find a great plan there, you can also find great deals on a site like eHealth.
Okay, now that you know what to be aware of before you start looking, it is time to get into what you need to know while you are actually on the hunt.
What Type of Health Insurance Plan Do You Need?
It is so important you realize what type of health insurance plan you are actually looking at before signing on. This way you know what to expect and you can be sure you will receive the coverage you need.
PPO vs. HMO Plans
To start, there are PPO and HMO plans.
HMO stands for Health Maintenance Organization and is a type of plan that will allow you to go to any doctor in your network, meaning a pre-approved list of health providers, and still receive financial help via your plan. The advantages to these plans are that they are generally cheaper than PPOs. An example of an HMO is Kaiser Permanente.
PPO stands for Preferred Provider Organization and is a type of plan that allows you to go to health providers in your network as well as health providers outside of it. Generally, HMOs are less expensive but mean a much more limited range of care than PPOs because you can only go to listed doctors and hospitals if you wish to use your insurance. Blue Cross Blue Shield is an example of an insurance company that provides PPO plans.
Less common are EPO plans. EPO stands for Exclusive Provider Organization and is a type of plan very similar to an HMO plan. You must see a provider within their network, although there is slightly more flexibility within the network.
Health insurance plans also offer varying deductibles, which can be lower or higher depending upon your plan. Your deductible is what you pay before you are able to make a claim, which can be a pain at first because your upfront costs are higher. For example, let’s say you are unfortunate enough to have an accident. Your plan carries a $1,000 deductible but your hospital bill is $10,000. That would mean you would have to pay $1,000 out-of-pocket and your insurance would pick up the tab for the other $9,000. If you don’t end up using your insurance very often, you may be able to save money by opting for a higher deductible because it usually will mean you pay smaller premiums.
Your premium is the amount of money you pay each month to your health insurance provider for your coverage. Premiums are the money health insurance companies collect for taking on the risk of having to pay health providers on your behalf if you become sick or injured. The idea is that health insurance companies will collect enough money in premiums from people who stay healthy to offset the costs they have to pay out on behalf of those who become sick or injured.
Coinsurance is also offered by some insurance plans. With coinsurance, you still have to pay a deductible, however, after that is paid, you then pay a certain percentage of whatever claims are left over as well. For example, if your coinsurance is 20%, you would pay your deductible plus 20% of all of the remaining medical costs. Again, the benefits to this tend to be lower monthly premiums, though it can end up being costly if you think you will use your insurance on a more regular basis. Take note however, if you do opt for a plan that requires coinsurance, many have an out-of-pocket-maximum, which is a set maximum amount you will have to pay — including your deductible — before the insurance company takes over payments altogether.
Finally, you need to take into consideration your plan’s policy on co-payments, which is a preset payment amount charged to you every time you visit the doctor. For example, your co-pay may be $25, which means when you go into the doctor for your annual check-up, you will pay $25 for the visit and your insurance company will cover the remainder of the bill charged by the doctor. If you don’t plan to visit the doctor often, you can opt for a plan with a higher co-payment in exchange for a lower premium. However, if you anticipate visiting the doctor often, you might want to opt for a higher premium in exchange for significantly lower co-payments.
Choosing a health insurance plan can be a daunting task as there are multiple sources of information out there. However, if you understand the concepts and terms above, you are already well on your way to being able to make a decision. Now, you just have to do your research on what’s available in your area and compare the costs and coverages offered by each plan to determine which plan is the right health insurance plan for you.This post contains advertisements and/or affiliate links. For more information, see our disclosure here.