The next step, after deciding which health plan benefits best meet your needs, is to use your requirements in comparing various health insurance options. Since most insurance companies have several different health plans to choose from, you will also want to consider certain things about the various insurance companies, as well as the plans that they offer. Here is a list of some things you may wish to consider when looking at an insurance company.
Member Services Provided by the Insurance Carrier
Many health insurance companies provide special services to their health plan members. These may include things such a nurse help hotline, educational classes for specific illnesses, healthy living programs, discounts on health care products and many other things. Although these are benefits that are typically included in all of the health plans that are offered by a specific insurance company, the costs of maintaining these programs are built into the plan premium you will be paying to be a member. Review the member services offered by an insurance company and determine if any of these will be beneficial to you.
Physician and Hospital Network
This is probably one of the most common concerns for a consumer looking for a new health insurance policy. Does my doctor accept this insurance? What hospital will I need to go to for medical treatment? Many physicians and hospitals contract with many different insurance companies. If you have a regular physician you might wish to check with them to see which insurance companies they contract with. You may even get some feedback as to which insurance companies are the easiest to work with on pre-authorization for certain types of medical treatments. Your location is also an important consideration when reviewing the contracting network of physicians and hospitals. Perhaps some health plans have a better selection of physicians in specialists in your area.
Cost of the Premium Compared to Expected Out-of-Pocket Medical Expenses
Although some health insurance plans are more comprehensive than others, you will not find a health plan that pays for 100% of all costs. You will need to look at one plan versus another to determine if the different in monthly premium makes financial sense. Here are some questions to ask yourself:
How much will I need to pay toward my own health care costs before I receive benefits from my health plan?
This is usually determined by the annual deductible that is associated with the health plan of your choice. Is this annual deductible an amount that you would be able to pay if you were to be hospitalized? Also consider the savings in your monthly premium if you were to increase the deductible option. For instance, let’s say that you are looking at a health plan with a $1,000 annual deductible. You are also considering a different plan that offers the same coverage, but the deductible is $2,000. You would save $100 per month on your premium if you go with the $2,000 deductible. Your annual savings would be $1,200. The difference you would pay toward your own medical expenses would only be $1,000. So, the logical choice would be to choose the health plan with the higher deductible.
Once the deductible has been met, what is my continued share of health costs for the remainder of the year?
You must look at two important factors when analyzing this portion of your health plan, the coinsurance percentages and the “annual out-of-pocket” maximum. Your coinsurance is the percentage that you pay toward health care expenses. The “annual out-of-pocket” maximum is the amount the determines when your coinsurance will stop for the year. So, let’s use an example of a health insurance policy that has a 30% coinsurance and an annual out-of-pocket maximum of $5,000. This means that in the event of a costly hospital stay, you will pay 30% of the hospital expenses until your share of cost reaches $5,000. Once you have reached this maximum, the insurance company will pay for 100% of all covered expenses for the remainder of your benefit period. Now, let’s compare that to a plan that has the same coinsurance, but the annual out-of-pocket maximum is $10,000. Let’s assume that the monthly premium for this high out-of-pocket plan is $180 less per month. That would be an annual savings in premium of $2,160. However, the more expensive health plan would have been the better choice if you were hospitalized during the year.
Certain services , such as doctor visits, may offer a special co-payment amount. Do these make financial sense to me?
Naturally, this will depend on how often you go to the doctor. For most people, the cost of an occasional office visit does not justify the additional premium charged by a health plan that offers set co-payment amounts for office visits. Speak with your physician and find out what the charges are for a standard office visit. If your doctor charges a rate of $50 for an office visit, and your health plan gives you the office visit at a $20 co-payment, you are really only saving $30 when you go to the doctor. Does this substantiate the additional health insurance premium amount you are paying for this benefit. The biggest expense when going to the doctor is usually not the office visit fee, it is the cost of lab and radiology needed to diagnosis many illnesses. Most health plans, with the exception of HMO plans, do not consider these services as part of the office visit fee.
What about using doctors outside of the network?
Does your plan even allow this? Most HMO plans will not provide out-of-network benefits unless it is a life threatening emergency situation. If your plan does provide you with coverage out-of-network, what are the coinsurance percentages and limits on this type of coverage. Typically, your coinsurance will be considerably higher and there may also dollar limits as to how much out-of-network benefits your health plan may pay each year. Closely review these differences between one plan versus another when making your choice.
What are my expected annual costs for services not covered by the health plan?
Perhaps you have found a medical insurance plan that seems to meet most of your requirements, but that plan does not offer dental benefits. You may wish to pay for your dental care out of pocket, or purchase a separate plan to just cover dental benefits. This are usually minor considerations in which you may need to compromise when settling on the best health insurance plan based on other needs and expectations.
Are there any limits on how much the insurance company will pay for certain illnesses or toward annual benefits?
You must review the plan details closely for this important factor. You may find a health plan that has much lower premiums than all other health insurance plans you have reviewed. It may even offer low co-payments for doctor’s office visit and annual physical exams. So, why is the premium so much cheaper? This might be because of the limits that insurance company has placed on paying benefits. Perhaps the plan has a annual limit of $100,000, or a very low lifetime maximum benefit. Hospital bills can run into the hundreds of thousands of dollars for a serious illness. Other plans may limit hospital benefits to a maximum number of days, or a maximum daily dollar benefit amount. Review the health plan closely to make sure that these are not the reasons for the lower monthly premium.
Nobody can accurately determine what their health care costs will be during the next year. If you knew this, finding the right health insurance plan would be a much simpler process. However, you can get a good idea of what to potentially expect based on your past health history. For the unexpected illness or injury, make sure that you choose a health plan that provides you with adequate coverage for high hospital costs, while at the same time making certain that you are able to pay your share of costs associated with that chosen plan. Most private hospitals require proof that you can pay the bill before they admit you for treatment. An adequate insurance policy is the best way of providing this proof of being able to meet that liability.