Deciding on a health insurance plan can be confusing. We are here to let you know which benefits are most important, so you can make an informed decision.
The most important part of any health insurance plan is the deductible. A deductible is the amount of expenses that must be paid out of pocket before an insurance carrier will cover any expenses. Most deductibles can range from $1,000 to $5,000. As a general rule, lower deductible plans tend to have higher monthly premiums, and higher deductible plans tend to have lower monthly premiums.
Low deductible plans are best for people who visit their doctor(s) often because they keep out of pocket costs to a minimum. For younger, healthier adults who rarely visit their doctor(s), high deductible plans are a good way to save money because they have lower monthly premiums.
Another key benefit to look at when comparing health insurance plans is the out-of-pocket maximum. The yearly out-of-pocket maximum is the highest or total amount your health insurance company requires you pay toward the cost of your health care. Out-of-pocket expenses include any expenses paid for health-related services excluding your monthly health insurance premium. Some typical out-of-pocket expenses include an annual deductible, coinsurance and copayments for doctor visits and prescription drugs.
Out-of-pocket maximums are meant to protect consumers from very high additional costs. Usually, once a person has reached their out-of-pocket maximum, the insurance company will cover 100% of the costs they consider to be medically necessary. It is also important to note, some out-of-pocket expenses will count toward your deductible, but not all.
When comparing health insurance plans, coverage for office visits is another important factor. Some plans allow a certain number of visits per year; others are unlimited. Some plans also require a specified copayment per visit. Copayments are a small portion of the actual cost of the doctor visit. Some health insurance carriers require a higher copayment be made for visits to specialists.
Provider networks are groups of doctors and medical facilities contracted to perform medical services at a discounted rate for the members of health insurance plans. The participating doctors and medical facilities in a provider network are referred to as “in-network.” Conversely, doctors and medical facilities not participating in the provider network are considered “out-of-network.” Participating doctors and facilities vary from network to network, as well as carrier to carrier. The benefit of provider networks is that if you choose to see an in-network provider you can take advantage of the providers discounted rate and consequently keep healthcare costs lower.
If you already have a preferred doctor, it is important to find out if that doctor is part of the provider network for the plan you are considering. If your preferred doctor is not part if the provider network for a particular plan you may want to consider another health insurance plan with a different provider network, or you could accept the high cost of seeing an out-of-network provider. It is also important to note that some plans, generally PPOs, will offer limited coverage for out-of-network providers. However, HMOs will not cover any care from out-of-network providers.
Prescription coverage is another key benefit. Most plans cover generic, brand name and nonformulary drugs differently. Each has its own set copayment. We like to see competitive generic Rx coverage at around $10 – $15. Most health insurance plans require a separate prescription deductible; this prescription deductible does not count toward the plan deductible.
Inpatient care coverage is usually obtained by paying a copayment or by covering a percentage of the total cost. Impatient care coverage is important because you never know when an accident may happen.
Out-of-Network Outpatient Care
Lastly, out-of-network outpatient care is important because most specialists are not contracted with health insurance plans and are therefore out-of-network. Patients seeking care from an out-of-network specialist can either go to a hospital or surgical pavilion for care, but surgical pavilions tend to cost less.