Choosing a health insurance plan can be a daunting task. Knowing a few key points before you start comparing plans can make the process much easier. There are several categories of health plans, including health maintenance organizations (HMOs), preferred provider organizations (PPOs), and high-deductible plans. It's important to consider your preferred doctor, the network of providers, the premium, out-of-pocket costs, and deductible when selecting a plan.
If you don't have a preferred doctor, it's wise to look for a plan with a wide network of providers so you have more options. When selecting a plan, ask yourself if the premium is affordable and if the out-of-pocket costs are reasonable. A deductible is the amount of money you must spend out of pocket on medical care before your health insurance takes effect. For example, if your employer offers a high-deductible plan (also known as an HSA plan) with no annual premium, this could be a great financial advantage.
However, it's important to note that this type of plan only covers care from doctors in the insurance network. You should also check the provider directory to make sure your preferred doctor is included in the plan's network. High-deductible plans are also the only plans that qualify you to open a health savings account (HSA). This is a tax-advantaged account that you can use to pay for medical expenses.
Keep in mind that if you go to a doctor or hospital that isn't included in your network, your plan won't offer any coverage. Therefore, it's important to eliminate any plans that exclude your preferred doctor or don't have local doctors in the provider network. When comparing plans online, look for a link to the summary of benefits which explains all the costs and coverage of the plan. This will help you determine which plan is best for you based on your individual needs and budget.
For instance, if you don't need much medical attention, it may not make sense to choose an expensive plan with low out-of-pocket costs.