Are you ready to shop for a new health insurance plan? Open enrollment for 2020 is here, and it’s time for millions to start shopping for or renewing healthcare plans for the coming year.
It can be a big, confusing task, especially if you don’t get your insurance from your employer. Then it’s up to you to decide what the right health insurance plan is for your family.
You have to know how to choose an insurance plan that fits within your budget and doesn’t cost you a small fortune to get healthcare. About two-thirds of all bankruptcies in the U.S. are due to medical bills.
You can avoid that situation by choosing the right plan and understanding how your insurance works. Read on to learn how to shop for the best insurance plan for your family.
Understand Healthcare Terms
Your health insurance is your responsibility. You have to educate yourself on the healthcare terms to understand exactly what you’re covered for. Only 4% of all Americans fully understand these terms and how they impact their finances.
Here are the most important terms that you should know when you’re shopping for health insurance plans.
Premium
The premium is how much you’ll pay each month for health insurance. Too many shoppers look at the premium only, thinking that this is a great deal for health insurance.
You can assume that if your monthly premium is low, you’re going to pay for healthcare elsewhere. If you’re getting health insurance through the healthcare exchange (otherwise known as Obamacare), your premiums may be lower thanks to a tax credit.
When you apply, you have to enter your income information for the upcoming year. You’ll get a tax credit based on this information, which can be applied towards your monthly premium.
You have to get your income estimates just right, which could be tricky for self-employed people. If you underestimate your income, you will have to pay back part of the premium on your tax return. If you overestimate your income, you may get a tax refund.
Deductible
This number is more important to look at before the monthly premium. The premium is the amount that you pay for healthcare before your insurance company makes a contribution.
In most cases, when you have a low premium, the deductible is high. For example, you have a plan where you pay $250 a month for your family. The deductible is $10,000.
You’ll have to ay $10,000 out of pocket before your health insurance plan contributes anything to your healthcare expenses.
Ideally, you want to have a healthcare plan that has a reasonable monthly premium and a low deductible.
Co-Pay
Whenever you go to the doctor or visit the emergency room, you share that cost with your insurance provider. A co-pay is the amount that you pay for that visit.
Co-pays are usually broken down into three categories – emergency room visits, physician visits, and specialist visits.
Look very carefully at your insurance plans while you’re comparing them. Some insurance plans don’t offer co-pays until you meet your deductible. If you have a high deductible, you’re going to pay a lot more out of pocket.
Other plans have a high co-pay, where you pay about $60 for a physician’s visit and won’t cover a specialist’s visit until you meet your deductible.
Of course, you don’t expect to have to visit the emergency room, but life happens. You want to make sure that you don’t have to pay too much for that visit. Co-pays range from $100 to a percentage of the bill.
Co-pays usually only cover doctors that are within the network of the insurance company. If you go to a doctor or hospital outside of the network, you can expect to pay more.
What Kind of Coverage Does Your Family Need?
You want to make sure that you use the insurance plan that you’re paying for, which is why you need to know your family’s needs.
For example, you may have small children to consider who need regular doctor’s visits. You may also want to have dental and vision coverage for children in your plan.
Are there medications that you regularly take? Do you prefer to have specialists like chiropractic care and mental health support covered in your plan?
Take the time to think about your situation and how you’re going to use health insurance. It will help you narrow down your options as you start shopping.
How to Compare Plans
Now is the time to start comparing health insurance plans. Here’s what you need to know when you’re comparing plans.
Compare Plan Coverage
The first thing that you want to do is look at the coverage that the various plans offer. Check to make sure that your regular doctors are in the network.
Also, look for prescription coverage to make sure that your prescriptions are covered. Some plans may offer coverage for alternative medicine like acupuncture or massage.
Compare Out of Pocket Costs
It’s time to break out your calculator. The real difference in healthcare plans lies in the total amount you’ll pay throughout the year.
Take your insurance premium and multiply that by 12. Add the deductible, and estimate how often you’ll visit the doctor. Also factor in your coverage for prescription medications.
You want to compare the total costs of the plan to figure out how much your plan will actually cost you.
How to Choose an Insurance Plan That Works for You
It’s not a simple task to choose a health insurance plan. If you no longer receive coverage from an employer, the process can be downright daunting.
One of the best things you can do for your family is to learn how to choose an insurance plan. Choosing the right plan ensures that your family is protected medically and financially.
Figuring out health insurance can be intimidating, but it doesn’t have to be. Contact us today to see how we can help you choose the right health care plan.