We all know the importance of quality health insurance—it’s peace of mind in the face of rising health care costs. But if you can’t secure coverage through work, and you need individual health insurance, choosing the right policy isn’t always easy. You know you need coverage, but you’re not exactly sure how much. And, you certainly don’t want to pay more for it than you should.
Finding medical coverage that works for you and your budget isn’t complicated—you simply need to know what to look for. With reliable, affordable health insurance as the goal, here’s how to find the right coverage at the right price.
Understand Your Options – HMO, PPO, EPO or POS?
Major medical insurance plans are available in a few different formats. Before trying to choose the right plan, take a minute to understand your options.
Health Maintenance Organization (HMO) HMOs are the most popular, but also the most restrictive. You must stay within a specified network of doctors, hospitals and pharmacies. Generally, you choose a primary care physician who coordinates your medical care. An HMO is ideal if you plan to visit the doctor regularly.
Preferred Provider Organization (PPO) With a PPO, you are not required to stay within a defined network, but going outside for care may cost more. In general, you don’t need a referral to see a specialist, and you don’t need to choose a primary care physician. A PPO is ideal if you plan to need frequent specialist care.
Exclusive Provider Organization (EPO) EPO plans offer increased flexibility, as you don’t need to choose a primary care physician, although you still need to stay within the network. An EMO is ideal if you don’t mind networks, but would rather not be limited to one doctor for all your care.
Point of Service (POS) A hybrid of both HMO and PPO, POS plans require that you choose a primary care physician, but offer the most versatility by allowing you to go outside the network. POS plans are ideal if you want complete flexibility to choose any provider, and don’t mind paying a little extra for it.
Consider Out-Of-Pocket Expenses – Deductibles, Copays and Coinsurance
In addition to a monthly premium, health insurance plans have a variety of out-of-pocket costs that you need to pay. While there are many variables involved, the lower your premium, the higher your out-of-pocket expenses will be.
The deductible is the amount you need to pay before your health insurance kicks in. Different plans offer different deductible amounts, which raise or lower your monthly premium. For example, choose a high deductible and you can generally find a lower monthly premium. However, in the event you need costly medical care, a high deductible can be tough—you must pay it in full before your insurance will pay.
A low deductible is easier to meet, which means your insurance kicks in faster, as you are likely to pay your full deductible amount faster. Nevertheless, be sure to consider the trade off carefully as you think about a plan that’s right for you.
Copayments and coinsurance are different forms of cost sharing. A copay is a fixed amount you pay for a particular service. For example, you may have to pay a $15 copay each time you visit the doctor, or a $10 co-pay for each prescription. Coinsurance is a percentage of the medical bill you are required to pay after meeting your deductible. Coinsurance of 10 percent means you will pay 10 percent of all care you receive. For example, if a service costs $100, you would be responsible for paying $10. Compare cost sharing requirements of different plans to find one that meets your budget. In general, plans with lower premiums have higher cost sharing requirements.
The good news is, there are many health care services that are covered at no cost to you—even before your deductible is met. Preventive care, such as health screenings, vaccinations and reproductive services for women are available without having to pay a copayment or coinsurance.
Get Personal – Think About Your Unique Needs
The most important thing to remember when looking for the perfect plan is that we are all unique, with different needs. A terrific plan that works great for a friend may not be the right plan for you. Take a minute to think about your unique needs, and look for coverage that cater to those needs.
For example, if you have diabetes, or a chronic condition that requires frequent visits to a specialist, take that into consideration when looking at your options. If you’re a single professional in great health, a high deductible may be a smart money saving strategy. For a growing family, where frequent doctors visits are common, a small deductible with a slightly higher premium may work better.
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