If you are lucky enough to have employer-provided health insurance, this limits your options to the plans your employer offers. If you don’t have insurance coverage through your job, an organization or association to which you belong may allow you to purchase health insurance at a group rate.
Another option is to check with your local Obamacare health insurance market to see if you are eligible for an upfront premium credit, which would reduce premium costs. Even if you don’t qualify for the loan right away, buying your health insurance through the marketplace means you may qualify for it when you file your tax return for the year.
If you cannot or do not want to purchase health insurance from any of these sources, you will have to resort to purchasing a private plan. It gives you the widest range of options, but will likely be a lot more expensive.
Decide what type of policy you want to buy
Health insurance policies come in a variety of basic types, although you may not be able to access all of these options through your favorite source. Health Maintenance Organizations (HMOs) are a very common form of health insurance. With an HMO, you must use healthcare providers within the policy’s network and you must obtain a referral from your GP to see a specialist.
Preferred Provider Organizations (PPOs) are also widespread. A PPO health insurance policy has a network, but you’re not limited to network coverage – although using network providers is cheaper – and you don’t need referrals to see specialists.
Exclusive Provider Organizations (EPOs) are a mix of HMOs and PPOs. You must adhere to the network of the plan, but do not require referrals for specialists. Finally, a less common option is Point of Service (POS) plans, which are essentially the opposite of an EPA. You are not limited to the POS plan network, you will need a referral to see a specialist.
Of the four common types of plans, an HMO or EPO tends to be cheaper than a PPO or POS with the same coverage level. However, if network coverage in your area is poor or you don’t want to be limited to carriers, it may be worth paying a little more to get a PPO or POS policy.
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High deductible versus low deductible
The higher a plan’s deductible, the lower the monthly premiums, all other things being equal. A high deductible means you’ll have to pay for many medical expenses yourself before the insurance policy kicks in, but if you have little or no medical expenses in any given year, these plans can be a bargain. Very low medical costs mean you’re unlikely to exceed the deductible, even with a low-deductible plan. So getting a high deductible plan keeps your insurance costs as low as possible while still protecting you should something catastrophic happen.
If you choose to go the high-deductible route, your best option is to get a Health Savings Account (HSA)-eligible plan and fund it with at least the equivalent of a yearly deductible. An HSA plan neatly covers the biggest weakness of high-deductible health insurance – which is that you would have to shell out a lot of money for a large medical expense before the insurance would take over. If you have a year-round deductible tucked away in your HSA, you can simply use that money to fund your share of the expenses while still enjoying the triple tax benefit that an HSA offers.
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Compare coverage
There are two main factors that affect how well a particular plan will cover your medical expenses: the plan’s network and its coverage policy. Even if you opt for a plan with off-network options, such as a PPO, you are still better off using healthcare providers on the network as often as possible as this will lower your costs. And the rules that a particular health plan uses to decide what’s and isn’t covered — and what the co-payments will be — can make a big difference in how helpful a particular policy really is for you.
For example, if you take a fairly expensive drug every day, you definitely want to get health insurance that lists that drug on the prescription. If you travel a lot, stick to plans that offer good treatment options outside of the area. And if you already have a GP, you should definitely choose a plan that includes your doctor in their network.
Search for the best deal
If you’re stuck between two or three different guidelines and can’t decide which one to choose, try this exercise. Multiply the monthly premium by 12 to get your annual cost for a plan, then add the plan’s maximum deductible. The result is the maximum amount you would spend on healthcare if you had one or more major medical expenses during the year. Do this calculation for each plan you’re considering, and then compare the results. The plan with the lowest total is probably the best deal for you.
Thanks to Mahadi Hasan Joy
