Which Health Insurance Plan is Right for Me?

Which Health Insurance Plan is Right for Me?
Jose Villanueva y Doraisy Avila consultan sobre planes de salud en Miami, Florida. | Foto: GETTY IMAGES

It’s not an easy decision, and depends on many factors, including your medical needs, where you live, your income, and the size of your family.

Regardless of whether you are eligible for group health insurance (through your employer or as a member of an organization), or if you choose individual health insurance, you definitely need coverage. We have created this short guide to help you decide what plan is best for you.

Premiums: the monthly expense you will have is a key factor to consider. If you can receive coverage through your employer, they might cover all or part of this amount. If you purchase a plan individually, you will pay 100% of this cost out of pocket. In general, the price of these premiums is related to the amount of your deductible (what you will have to spend out-of-pocket before the insurance company begins to pay for medical expenses). The higher the deductible, the lower your premium will be, and vice versa.

Coverage/benefits: The same insurance company can have various levels of plans with different coverage. This is where we recommend that you make a list of your medical needs, and those of your family who will be covered on the plan as well, to find out which coverages is best for you.

Access to doctors, hospitals, and other health care providers. It is important for you to confirm, among other information, that your primary care provider (your main doctor whom you want to continue seeing), as well as other specialists you or other members of your family are seeing, are in the network of providers for the plan you choose. For example, it’s important to ask if your child’s pediatrician is in the network for the plan you are interested in. Remember that if you see a doctor who is out of your plan's network, you will have to pay more money, even if you might be reimbursed for part of this. 

Access to medical care outside of the office hours and in emergency rooms. At some point you might have to go to an urgent care facility or emergency room. Because of this, it’s important to make sure you know how much your plan covers for these types of unplanned medical events.

Out-of-pocket expenses (coinsurance, copayments and deductibles). Depending on your plan, you will have more or less of these types of up-front costs. For example, if your deductible is $500, this means that you will have to pay this amount of your own funds before the insurance company begins to pay. The same happens with co-pays, for example, when you see a specialist.

Exclusions and limitations. No medical plan will cover everything. This is why it’s important to be fully aware of what your plan covers, and its exclusions and limitations on care.

Tip: don’t wait until an emergency or a complicated medical situation arises to ask these questions. You have every right to ask any time a question comes up.

Even if you are covered by your employer’s plan, there’s still a lot for you to know. What do your plan or plans cover? Does it meet your family’s needs? Do you need a referral or prior approval to see a specialist?

Two Main Types of Plans

They are known as indemnity insurance, coverage that is not based on a network of providers, and managed care plans, which use a network of providers. The main differences between these plans is access to doctors, hospitals, and other specialists; your out-of-pocket expenses; and the way medical bills are paid.

Indemnity insurance

These types of health care plans offer more flexibility in choosing doctors and hospitals. In general, you can make an appointment with the doctor you wish without the need for obtaining a referral from your primary care physician. Though sometimes the specialist will require that your primary care physician send certain information.

On these types of plans, your annual out-of-pocket expenses are usually higher for certain services and you generally have to pay more before the insurance company starts to cover expenses (deductible). Deductibles vary greatly from one plan to another.

Generally the process goes something like this: after you receive a service, the doctor sends a claim to your insurance company. They then pay their part (which is usually around 80%), and then the doctor sends you a bill for the rest. Prior to receiving the bill, you might receive a bill from your insurance company explaining what they paid and what you will be responsible for. This first letter is NOT a bill.

These types of policies generally have lifetime limits on benefits. Most experts recommend choosing a plan with a limit of at least $1 million dollars.

Managed Care Plans

More than half of people with health insurance in the United States are enrolled in this type of plan. They tend to cover a wider range of health care services, and the costs are lower if you use doctors and other health care providers who are in the plan’s network.

Usually beneficiaries aren’t required to fill out forms or make claims, and pay a copay of just $10 or $20 for an appointment. It can be a little higher if you are seeing a specialist.

These types of policies usually have what are known formularies, which is the list of medications covered, and the amount of the copay will vary depending on if you are purchasing a generic or brand name prescription. If you are already taking medication, for example if you have a preexisting condition, or if someone in your family is required to take medication daily, make sure you check the formulary for the plan to see if it’s covered.

Some of these managed plans have a pharmacy where you can send a form and receive your medication by mail, which is generally a 3-month supply. This is usually a more cost-effective option than going to your local pharmacy.

Tip: always make sure that the doctor you see is in your plan’s network so that you will pay less out-of-pocket.

There are three types of managed care plans:

  • Heath Maintenance Organization (HMO)
  • Preferred Provider Organization (PPO)
  • Point of Service (POS)

HMOs

Traditionally, the focus for these types of plans is primary and preventative care. These plans focus on the primary care physician, who is the individual charged with watching over all your medical care and ensuring your health needs are met.

Consequently, your primary care physician is the person who will coordinate any care with specialists. This is why, upon registering with these plans, you are required to choose a primary care provider.

HMOs require paperwork to be completed, especially when you need care at hospitals or non-emergency healthcare facilities.

Though in the past this has been the overall philosophy for these plans, they have gradually begun to change, which is why it’s a good idea to check the details of the specific HMO plan you are interested in.

PPOs and POS

These plans are more flexible than HMOs when it comes to choosing your doctors and other health care providers. Premiums are also usually higher as well.

Your out-of-pocket expenses will be lower if you choose a physician in the network, but you will likely be reimbursed if you choose a provider that is out-of-network. You probably won’t need a referral from your primary care physician if you need to see a specialist, but you will have to fill out some forms.

Just as in other cases, there are many options for PPOs and POS, which makes it important for you to compare plans.

Sources: AHRQ, HHS, CMS.

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