Informed Insurance Shopping

It can be a challenge to find health insurance coverage that meets your needs and fits your budget. Cost isn’t the only factor—benefits are important, too. You have a lot to consider when deciding which plan is best for you.

Some tips as you are shopping for insurance:

  •  Estimate what healthcare services and medications you require.
  •  Do your best to balance the cost (monthly premium) of a policy with the protection it offers.
  •  Determine what you will have to pay yourself for covered services (deductible, coinsurance, and copayments).
  •  Check whether the plan’s network of healthcare providers includes your current doctors,pharmacy, etc.
  • Make sure the plan has an out-of-pocket maximum to protect you from very high medical expenses.

Balancing the Costs

What kind of health insurance can I afford? This seems complicated, but if you look at the coverage you need and factor in the costs, you will get the total picture. The plan with the lowest premium may not be the best overall value, depending on your medical needs.

The most obvious cost is the monthly premium, but you also have to consider how much you will pay when you get services:

  • How much you will have to pay before insurance coverage begins (deductible)
  • What you will have to pay after you meet the deductible (copayments and coinsurance)
  • Note: If you’re shopping for a family plan, factor in the cost of a family deductible.

Finally, the plan’s out-of-pocket maximum tells you the most you would ever have to pay in a given year if you had very high medical expenses.

Keep in mind: Plans with higher deductibles have lower premiums, but if you need care, you’ll pay more of the cost up front.

Here’s How It Works
Example:

Your plan’s features:

  • $1,500 deductible
  • 20% coinsurance after deductible
  • $4,500 annual out-of-pocket maximum

You need knee surgery:

  • Your doctor has confirmed that the surgery will be approved by your health plan.
  • The total bill for the surgery is $11,000.
  • You have not yet paid any out-of-pocket expenses for the year.

Surgery cost                                                               $11,000

You pay your deductible                                              $1,500

Remaining cost                                                            $9,500

You pay coinsurance for the remainder of the bill       
(20% of $9,500)                                                             $1,900

Remaining cost                                                            $7,600

Your health plan pays                                                  $7,600

You have now met your deductible for the rest of the year. If you need other healthcare services to which the deductible applies, you will only have to pay $1,100 more in coinsurance. After that, you will have reached your out-of-pocket maximum for the year.

Check the Coverage

  • What about the network? Look at the provider network to see if the doctors, pharmacies, and other healthcare providers you use are in the network. Health insurers negotiate lower rates with in-network providers, and these savings typically mean members pay less out-of-pocket when they go to in-network providers.
  • What about prescriptions? Most plans have a formulary, or list of covered drugs, and many have different levels of copayments. Since prescription drugs can be very expensive, lower cost drugs such as generics usually have lower copayments than more expensive brand name drugs. Also,some plans offer lower copayments on long-term medications if you get them through the plan’s mail-order pharmacy.
  • Bottom line: It may be cheaper in the long run if the plan you choose covers more of the services you are going to use.

What Else Do You Need?
Not all plans cover all services, but you may be able to add coverage with separate policies, such as a dental plan.

Make Sure You Understand
Read and understand your policy. If you have questions, call the company’s customer service or sales department or ask your employer’s benefits administrator.