Health insurance is critical for any family. You don’t want to find yourself in the position of being sick or injured but unable to pay for the care that you need, especially if there are children in your home. Deciding on the health insurance that’s right for you, however, can be a challenge. How does your deductible work? How much of your care will insurance really cover? Deciding on the perfect health care plan will help you better protect and provide for your family.
Finding the best deal on health insurance revolves around accurately predicting your future health care needs. The more precisely you can anticipate your own and your family’s medical needs for the future, the less likely you are to end up underinsured or overinsured. As well, the healthcare industry and health insurance is changing rapidly as the Affordable Care Act rolls out new developments each year.
In this post, learn what you need to know to find the best deal on health insurance for your personal needs and financial situation.
Tip #1: Know what you can’t live without.
Here is an easy example of this tip. If you know you are pregnant and will be delivering your baby within the next several months, then you know that you need your health insurance to cover maternal and delivery care. This is not optional — this is a requirement your medical insurance plan must meet.
The more accurately you can pinpoint the health plan features you absolutely cannot live without, the easier it will be to identify the plans that can meet those needs and disregard the rest. As well, when you have narrowed your vision to the must-haves, you will be less easily distracted by bells and whistles that might be nice to have but which really don’t add much to your plan value.
TO DO: Your first step now is to make a list of the coverage you absolutely cannot live without. Then you can evaluate each plan financially based on your must-haves list.
Tip #2: Check your doctors and drugs first.
Today’s health insurance plans are becoming ever more specific about the doctors and the drugs that are covered. For instance, each plan has its own policy about generic versus brand name drugs, and preferred versus non-preferred brand name drugs.
Also, different doctors are contracted to accept different levels of health care plans.
This is especially important to know since each health insurance provider may offer multiple plan types (i.e. PPOs, HMOs, high deductible plans, et al). Just because your doctor accepts one type of plan by a particular insurer doesn’t mean they will accept all the other plan types too.
TO DO: Be sure to check with your doctors to verify they accept both the insurer and the specific plan you are on before you sign up for a new health insurance plan. Otherwise, you may get a great deal financially but have to find a new doctor who may not be as good a fit for your health needs.
Tip #3: Know what you owe by service.
There are all kinds of terms to become familiar with when you are shopping around for the best price on health insurance. Suddenly lingo like premiums, copayments, coinsurance, out of pocket maximums and out of network charges become very clear. Each term refers to the potential cost of different choices you make while using your plan. For instance, if you use physicians that are in network you will pay less per visit than if you use physicians which are out of network.
TO DO: Make a list of each major charge category (premium, copayment, et al) and what percentage you are responsible for paying. Do this for each health plan you are considering. Compare them side by side to see where you save the most on what matters most to you.
Tip #4: Pay close attention to the prescription drug policy on each plan.
This is an incredibly important part of the process of evaluating the best health insurance plan for the cost. You want to start with the medications you are taking now that you know you will continue to need in the future. If you take the brand name version, you will want to check if brand name drugs are covered and if so, how much of the cost is covered. More plans are covering generic drugs only, so this is very important to research as well.
TO DO: Make a list of the drugs you take now and whether they are brand name or generic. Then find out how each plan handles those drugs.
Tip #5: Resist over-insuring.
This can be a tough call, especially if you have dependents or you are on an employer sponsored plan where more of the costs are subsidized through your employer. But the truth is, when you are over-insured, you are paying for medical insurance coverage you don’t need and won’t use. You could use those funds to better effect elsewhere, such as in a retirement fund or emergency cash fund.
TO DO: Before you automatically opt-in for the highest level health plan, take some time to evaluate if you really do need that much coverage. To find out, compare and contrast with the next plan level down.
Tip #6: Consider a high deductible plan combined with a Health Savings Account (HSA).
The high deductible plan plus HSA combination is fast becoming one of the most popular ways to both save money on insurance and maximize funds dedicated to medical and health care. The way this plan combination works is that you pay all your medical expenses out of pocket up to a higher deductible level, but you are paying them out of your HSA, which is an interest bearing investment account you can roll over from year to year.
With a HSA (which you can only qualify for if you select a high deductible health insurance plan), you can deposit pre-tax funds that will accrue interest and withdraw them to use them to pay for qualified health expenses without paying taxes. The catch is, you can’t use HSA funds to pay for your monthly premiums, and not all other medical costs are eligible. But when it works, it works very well!
TO DO: Consider the types of upcoming medical and health care expenses you anticipate bearing. If you work for an employer, find out if that employer offers a HSA plan. Otherwise, you can research HSA plans for individual insured persons. Compare the types of expenses you need to pay for with the expenses you can use HSA funds to pay for. This will help you decide if a high deductible health care plan with a HSA is the right affordable choice for you (you can also choose individual or family HSA/high deductible plans).
Tip #7: Factor in your family’s health needs.
The Affordable Care Act has made it mandatory with some health plans to offer certain health services for dependents even if they are not available for adults. In other plans, you can purchase additional services such as vision and dental as optional riders.
What is most important here is to make a list of all the types of health care your family will need and then find out if you can get them all through one single plan or if you need to buy a plan with multiple riders. Since this can change your monthly premiums costs significantly, you may find it makes more sense to buy a lower main health care plan and then use the remainder of the funds to buy the riders you need.
TO DO: Does your family need dental or vision care? Then be sure to add these costs in when you are comparing health plans.
Tip #8: Examine annual and lifetime limits.
Now that insurers are no longer permitted to deny coverage based on pre-existing conditions, the annual and lifetime out of pocket maximums and maximum payouts are more important than ever. Some services are categorized as essential while others are categorized as non-essential. Insurers have more leeway to impose legal limits on non-essential health services. If these are the services you need, you want to be sure the limits will not restrict the level of care your plan will pay for.
TO DO: Based on the services you will need, examine the annual and lifetime maximum payouts for different plans to see where you get the most coverage for what you need most.
Shopping for the best deal on insurance plans is by no means a task to undertake casually. Prepare to spend some significant time and effort reading through each plan, comparing and contrasting coverage levels, checking networks of doctors and drug coverages, looking at optional riders and evaluating how copayments and coinsurance works with each plan.
While at times it may feel confusing to do this kind of detailed plan-by-plan research, your health and your family’s health depend on your ability to identify the insurance that offers you the greatest amount of what you need most for a price you can afford. The good news is that if you do take the time to follow the eight tips outlined in this post, you will be able to identify the best plan for your family, enroll and have the peace of mind that insurance provides.