Finding the Best Health Insurance Plan for You

Finding the Best Health Insurance Plan for You

If you’re in an area with limited choices or your preferred providers are too expensive, it’s still possible to zero in on a plan that will work for you, regardless of company. To do so, you’ll need to understand what types of plans are out there, what kind of coverage is already included in major medical health insurance plans, and whether you have special considerations that will affect your decision.
If your budget is the major driving force behind your decision, be sure to check out How to Find Affordable Health Insurance in 2016. You’ll find a more detailed discussion of the shopping process and how to find the most affordable plan you can without skimping on coverage.

Selecting the right plan type

One major factor to consider is the type of health care plan that makes sense for you. But keep in mind that your location will also affect how much choice you have regarding plan types, just like it does with providers.
Whatever plan type you choose, note that the ACA has made lifetime and annual benefit caps illegal. That means that, with the exception of non-ACA-regulated short-term health plans, you will no longer be on the hook for all of your costs after going over a certain dollar amount during a certain time period — a massive benefit for anyone with health conditions that require extensive, high-dollar care.
All plans will also include an out-of-pocket maximum that limits the amount you have to pay each year before your insurance will cover 100% of your remaining costs. The ACA requires all deductibles, coinsurance, copayments, or similar charges to go toward this limit; however, your premiums and any spending on non-essential health benefits are among charges that don’t count toward the limit. For 2016, individuals’ out-of-pocket maximums are capped at $6,850 on the federal marketplace, and family plan maximums are capped at $13,700.

HMO

HMOs (health management organizations) may be the most infamous type of health insurance plan. This is likely because they’re the most restrictive. With an HMO, you must receive your care within your HMO’s provider network, and you must go through your primary care physician for a referral if you need to see a specialist. If you receive care out of your network, you could be on the hook for the entire bill except in the case of an emergency.
Cost management is the main goal, and advantage, of going with an HMO. HMOs are more likely to charge flat copays instead of coinsurance. This means you could pay anywhere from roughly $5 to $25 each time you need any kind of medical care or prescription. However, you probably won’t have to pay a deductible before your insurance kicks in every year — these can average $250 to $500 for individuals or families, respectively, but may cost even $1,000 or more if you opt for a plan with lower monthly premiums.
The lack of deductible can make HMOs a good choice if you’re on a tight budget and live in a city with abundant quality medical facilities, especially if you’re relatively healthy and don’t need a lot of care from year to year. An HMO can also be a good choice if you know you’ll need a greater degree of routine care (such as for pregnancy) and all of your providers are available in network. However, if you know you’ll need a lot of specialized care, you might find an HMO frustratingly limiting — and very expensive if you suddenly need to go outside of your network.

PPO

PPOs (preferred provider organizations) give you much more latitude to choose your health providers. You don’t need to go through a single primary-care physician to receive a referral. Though you still pay less if you stay in your PPO network, you probably won’t have to pay the whole bill if you decide to go out of network. If you want to shop around for doctors or have a condition that demands specialized care, a PPO could be your best bet.
While lower costs are the main pro of an HMO, higher costs are the main con of a PPO. You’ll need to pay your deductible before your insurance kicks in. As I mentioned above, that can be as little as a couple hundred dollars a year, or more than $1,000 if you opted for a plan with a lower monthly premium.
Your out-of-pocket costs don’t stop there: You’ll pay coinsurance for certain services instead of a flat copay. That could be roughly 10% for in-network services and as much as 40% for out-of-network care. If you go out of network, you may have to pay your bill upfront and then file for reimbursement, a potentially lengthy and frustrating process.
Ultimately, PPOs are usually the best choice for anyone who prizes flexibility over cost savings. If you have a complicated medical history and may need to see specialists, particularly out of network, a PPO can actually save you money over a more restrictive HMO. In general, however, you’ll probably pay a bit more out of pocket to have a greater degree of choice and control over your care with a PPO.

Hybrid plans: POS plans and EPOs

POS (point of service) plans aim to blend the characteristics of HMOs and PPOs. You’ll need to go through a primary-care physician for referrals, much like an HMO. However, a POS plan also allows you to receive care outside your network like a PPO.
A POS plan could be right for you if you really like your primary physician and don’t mind routing your care through him, but want to keep out-of-network flexibility. Costs tend to fall in between those of HMOs, which are on the cheaper end, and PPOs, which are more expensive.
EPOs (exclusive provider organizations) are the least common plan type. They’re also a blend of PPOs and HMOs. Like HMOs, you must receive care within your network. But like PPOs, you won’t need to go through your primary care physician to get a referral. However, you may need to get preauthorization for more expensive services.
EPOs may be a good choice if you expect to stay in network but don’t want to deal with referral paperwork. Costs also tend to be in the middle between HMOs and PPOs.

 

Short-term health plans

Unlike the other four plans on this list, short-term health plans are not major medical plans. They are inexpensive, stopgap plans meant to hedge against catastrophic health disasters, maybe while you’re between jobs or because you are shopping outside of open enrollment. Your deductible will likely be very high.
The major pro here is that short-term plans are the cheapest plans you can get. But ACA regulations don’t apply to short-term health plans, which are the only ones for sale when it isn’t open enrollment.
Buyer beware: These plans are not required to provide benefits such as preventive care, and there will be a cap on benefits — this is no longer allowed for major medical plans. You may not even qualify if you have pre-existing health conditions, which other health plans must accommodate under the ACA.
Ultimately, we don’t recommend short-term health plans unless you are young, healthy, and need coverage to hedge against the high cost of emergency care simply because you missed open enrollment. Otherwise, the fine print and exclusions on these plans make them a very flimsy substitute for major medical insurance.

Essential health benefits

One of the major requirements of the ACA is that all major medical insurance plans you can purchase as an individual (excluding short-term health insurance, discussed above) must cover a set of 10 essential health benefits. These benefits apply regardless of whether you buy your plan through a state or federal health exchange, from an insurance broker, or directly from an insurance company. They are as follows:

• Ambulatory (outpatient) care: This is care you receive on an outpatient basis — that is, without getting admitted to a hospital. It includes standard doctor’s office appointments and in-home health visits.
• Emergency care: This includes any care you receive for a potentially debilitating or fatal condition. Ambulance and emergency-room treatment are common examples.
• Hospital care: Any care you receive as a patient at a hospital or skilled nursing facility is covered. This includes lab work, surgery, medications, and any other treatment you receive as a patient.
• Laboratory services: Tests necessary to diagnose, monitor, or rule out certain conditions are covered.
• Maternal health and newborn care: This includes all prenatal care for expectant mothers, as well as labor, delivery, postnatal care, and newborn care.
• Mental health care and addiction treatment: Whether inpatient or outpatient, this includes any care necessary to diagnose, monitor, or treat mental illness or addiction. Some plans limit treatment to a certain number of days.
• Pediatric services: This includes all care provided to children, including yearly checkups, vaccinations, dental care, and vision care.
• Prescriptions: Plans must cover at least one medication in every federal category and class of prescription drugs. Insurers still have preferred-drug lists and may require generics over name-brand drugs, among other restrictions.
• Preventive care: This includes physicals, screenings, immunizations and other services meant to prevent or detect illness or other conditions, as well as the management of chronic conditions.
• Rehabilitative and habilitative care: These services help you gain or regain abilities limited or lost to or limited by injuries, illness, or other conditions. Examples might include physical therapy, occupational therapy, and speech therapy. Some plans limit treatment to a certain number of sessions a year.

source - http://www.thesimpledollar.com