Whether you are self-employed and need health care coverage, have several insurance plan options through your employer, or are entering retirement but need something until medicare kicks in, comparing and choosing the best health plan can be a daunting task. By determining what you can afford, and what best matches your health care needs you can find the best insurance plan for you and your family.
Our family found this out first hand when I became self-employed. At the time, my broker/dealer offered a group insurance plan and my wife also had health insurance with her job. We…or should I say…she dove into the numbers trying to analyze what was best for us.
Since then, our health insurance provider has changed at least three times, and each time faces the challenge of figuring out how the new plan compares with the old. Although a frustrating process, it truly does pay to understand what type of coverage you have.
Costs and Fees
The terms related to health insurance fees can be confusing and make comparing plans difficult. Understanding the terms and what they mean can help you compare and select the best and most affordable plan for you.
- Premium – The premium is the amount that you will pay for your insurance plan. You can break this down into yearly, quarterly or monthly payments with most insurance plans.
When selecting a plan, knowing how much you can afford to pay for your premium is probably the most important factor to look at. If you only have a certain amount of money budgeted for health care, then look for plans with options that fall in that range.
- Deductible – The deductible is the amount, out of pocket, that you are responsible for paying before your insurance will begin paying for covered expenses. For example, if you have a $200 deductible, you will have to incur and pay for $200 worth of medical expenses before your insurance will pay. Exceptions are made for certain types of conditions that don’t need to meet the deductible within most policies, such as for well child visits. Meaning if you haven’t met your yearly deductible yet, but your child is scheduled for a check-up, the check up costs would be covered by insurance.
When selecting a plan you may want to compare deductibles. Often if you have a lower deductible, your premiums can be a bit higher. If you choose a plan with a higher deductible, then the premium is probably lower. Determining how much you can afford to pay out of pocket and how often you tend to use your insurance coverage can help you select the plan that has deductibles that fit your budget.
- Co-Pay – The copay is the amount you have to pay for each type of office visit or emergency room visit.
The copay is usually expected to be paid at the time of the visit. Co-pay’s are usually as little as $5 per office visit, but can run as much as $50 for emergency room visits. Usually the cheaper the insurance premium and deductible is, the higher the co-pay amounts are. With some flexible plans with higher premiums, there are often no co-payments required.
When comparing health insurance plans, you want to be sure to select one that your physicians participate in. Having continuous quality care from your doctor is important so selecting a plan they participate in is often better then choosing a plan that will require you to switch doctors. Take this into consideration when comparing plans.
photo credit: leoncillo sabino