How to Choose the Right Medical Insurance Plan

It is a well-established fact that people are prone to make mistakes while choosing a health insurance plan. This is suggested by studies too. One study found that a whopping 80% majority of all employees of a particular Fortune 100 company picked health insurance plans that were not suitable for them. It was found that they tended to choose options with low deductibles, which eventually proved to be more expensive. Another interesting thing to note is that employees often miss out on some great benefits of inertia, as per another study. The term inertia refers to employees’ tendency to stick to the same healthcare plan when the annual review opportunity comes. According to the mentioned study findings, inertia leads employees to lose out on benefits worth as much as $2,032 each year.

The Confusion Is Of No Surprise

But this tendency of employees is hardly surprising to people who have taken some pain in comparing the various health insurance plans offered by employers. Acquaintance with the marketplace created by the Affordable Care Act or even Medicare supplemental coverage also makes people understand this tendency to be confused by these plans and the reasons behind it. The fact is that there are just too many variables that employers have to deal with while assessing the value and benefits offered by a particular insurance plan. These include:

  • The monthly payable premiums
  • The deductible or the sum you have to pay before insurance comes into play
  • The maximum amount you are required to make as out-of-pocket payments

Then there’s also the sum you will owe for medical tests, visits to physicians, and prescription drugs. It might be in the form of both co-pay( flat money sums) or co-insurance (a percentage) or both. The specific monetary amount depends not only on the particular insurance plan but also on the medical service type you are liable to receive. The amounts vary according to whether it is a lab test, hospital stays, preventive care, etc. Everything is often strictly demarcated in a life insurance plan. Even the prescription drugs differ not only from plan to plan but from year to year in the same program. Yet another variable is the particular medical service providers covered in the network of insurance plans.

It might be a difficult task, but you need to choose wisely during open enrollment for your good. You need to observe the following steps to achieve the same:

Make Sure That Your Deductible Is As Per Your Consumption

Experts usually advise people who are mostly healthy and rarely visit their doctors to opt for high-deductible insurance plans with low premiums. But according to other experts, this prevalent view may not be accurate, and such programs may even be fit for people who require lots of healthcare attention.

Make Sure That Your Deductible Is As Per Your Consumption

People suffering from a chronic illness or those with young kids often need to spend so much on healthcare expenses that even high-deductible plans are financially better. Additionally, high-deductible insurance plans (greater than $1400 for individuals or $2800 for a family as of 2020) qualify for tax benefits. However, it isn’t indeed suited for people reluctant to pay for healthcare due to out-of-pocket expenses.

Make Sure Your Doctor Falls Within The Network

It is an excellent idea to ascertain if your choice of physicians and specialists fall under the network that a health insurance plan you are considering covers. Remember that there is a significant difference between being in the network rather than only accepting an insurance plan. Healthcare service providers are often willing to bill your insurance company. Still, if they are not in the plan network, you will likely pay a significant amount of the cost. Click here to read more about PPO plans and how they work.

Make Provisions For The Worst Scenario

You should take adequate safeguards against opting for insurance plans that only seem suitable as per your past claim record. Remember, your health insurance plan needs to be appropriately equipped for worst-case scenarios. Additionally, there is also the need for you to take into account out-of-pocket limits. These limits set the maximum sums you need to pay besides your premiums. Such amounts usually vary from $2000-$6000 but can be higher or lower. Often, we find that the maximum charges for out of network and network service providers vary. Lastly, note that all insurance policies don’t need to have such maximum amounts.

Before calling it quits as far as this article goes, it should be stressed that you must assess potential insurance costs. You can do this by adding the annual premium sums with out-of-pocket caps. You should only proceed with choosing a plan if the sum is one you can afford. Otherwise, it is better to explore other options. Here’s hoping you remain in the best of health!