Choosing the right health insurance coverage is one of the most important decisions a family can make. Having adequate coverage gives families peace of mind, knowing that they will be able to receive the medical care they require without incurring exorbitant medical bills. This article delves into several key considerations for families as they compare health insurance plans and select the best plan for their needs.
Understanding the different types of health insurance plans
Health insurance plans are typically classified into four major types: HMO, PPO, POS, and HDHP/HSA plans. Understanding how these plans work and differ can assist families in selecting the type of plan that is best suited to their needs and budget.
An HMO, or Health Maintenance Organization plan, usually has lower monthly premiums but less flexibility overall. HMOs require members to choose a primary care provider who oversees all care and refers patients to specialists and hospitals in their network. Except in cases of emergency, HMOs typically do not cover out-of-network care.
A PPO, or Preferred Provider Organization plan, gives members more freedom in choosing providers, but seeing in-network doctors and hospitals usually saves families money on copays and deductibles. PPOs allow members to see out-of-network providers, but they may charge more for their services up to a certain limit.
A POS, or Point-of-Service plan, combines the features of both HMO and PPO plans. Members select a primary care provider to oversee and coordinate their treatment, but the plan also covers some out-of-network care costs. Costs and coverage for POS plans are somewhere between HMO and PPO.
An HDHP, or High-Deductible Health Plan, combined with a Health Savings Account, takes a different approach. These plans have lower monthly premiums than other plans, but they require deductibles of $1,400 or more for individuals and $2,800 or more for families. Members pay 100% of their medical expenses out of pocket until they reach their deductible, at which point insurance begins sharing or covering costs. An accompanying HSA account allows families to save pre-tax funds to cover out-of-pocket expenses. Any money left over at the end of the year is saved in the HSA for future healthcare expenses.
Consider Plan Premiums and Deductibles
When families compare health insurance options, two major factors that influence costs are the plan’s premiums and deductibles. Monthly premiums are recurring fees that members pay for coverage. Premiums for plans with larger provider networks and additional coverage benefits are typically higher.
Deductibles are the amounts that families must pay out of pocket for healthcare before insurance begins to cover a portion of the costs. Plans with lower monthly premiums typically have higher deductibles. When selecting a plan, families must weigh higher premiums against lower deductibles based on their financial situation, anticipated healthcare needs for the year, and approach to risk management.
Some costs are deducted from your annual health insurance deductible, while others are not. Deductibles typically cover doctor’s office visits, X-rays, MRIs, hospital stays, surgeries, medical equipment, and prescription drugs. Preventive services such as vaccines, well-child visits, annual physical exams, women’s OB/GYN visits, mammograms, and others are typically covered by insurance with no out-of-pocket expenses for the patient, even if they have not yet met their deductible for the year.
Understanding insurance coverage networks and options
One significant difference between health insurance plans that influences costs is whether members can only receive treatment from doctors and hospitals within a defined network or can see providers outside of that network at a higher cost. When families choose a health plan, they should look into which doctors, hospitals, pharmacies, and other facilities the plan includes in its provider network. Including their preferred providers reduces the likelihood of receiving unexpected medical bills later.
HMOs and EPOs, or Exclusive Provider Organization plans, require members to remain within the plan’s provider network in order to receive service coverage. Only emergency situations allow for out-of-network care. PPO and POS plans offer that out-of-network option, but members’ costs rise significantly when they visit providers outside the network. When choosing a plan, families must consider whether the network flexibility is valuable enough to justify paying higher monthly costs.
Consider Plan Coverage for Different Medical Services
According to the Affordable Care Act, certain essential benefits must be included to some extent in covered individual and family health insurance plans. The required benefits include:
Outpatient care, or ambulatory services
Emergency Services
Hospitalization
Maternal and newborn care
Mental health and substance abuse disorder services
Prescription drugs
Rehabilitation Therapy Services
Lab services
Preventive Care
Chronic Disease Management
Pediatric services, such as dental and vision care
While all plans now cover those services to some extent as a result of healthcare reform, the actual dollar amounts members pay out-of-pocket through copays, coinsurance, and deductibles can differ greatly between health insurance plans. When evaluating plan options, families should carefully compare benefits grids to understand the out-of-pocket cost differences for services they anticipate using. These distinctions are particularly important for families dealing with chronic illnesses such as diabetes or heart disease.
Some important areas where coverage and costs frequently differ between health plans include:
Prescription drug coverage – The plan’s formulary specifies which prescription medications are covered and what member cost tiers apply to generics, preferred brands, and non-preferred brands. Family members who have regular prescriptions should make sure those drugs are covered and understand any out-of-pocket costs they may incur.
Specialty services – Certain family members require specialized care, such as behavioral therapy, medical equipment, home healthcare, or specialty medications. Comparing plans based on the coverage provided for those services is critical for meeting a family’s specific medical needs.
Pediatric dental and vision coverage is an essential health benefit for children, but some plans only cover basic services and limit annual expenditures. Families with children should carefully compare dental and vision benefits across plans.
Provider choice and accessibility – The depth of the plan’s provider network influences a family’s doctor selection and the distance they must travel for care. Families should consider these provider factors when deciding whether or not to join.
Plan Ratings and Accreditations Also Play an Important Role
Families should consider the financial strength, reputation, and accreditation of insurance companies when evaluating health plans. Organizations such as AM Best and Standard & Poor’s provide financial strength ratings for insurance companies, indicating their ability to pay out member claims. The National Committee for Quality Assurance also rates and accredits health plans based on network adequacy, member satisfaction, prevention efforts, chronic care management, and overall quality of care provided. Families should compare plans based on ratings and awards to get a sense of the insurance company’s performance history.
The Significance of Reading the Health Insurance Plan Details
While we’ve gone over some of the most important factors to consider when selecting a family health plan, the specifics of each plan’s coverage and service costs can still differ. After narrowing down their options, families should read the Summary Plan Description, which contains all of the details about the insurance policy, before enrolling.
Key sections to review in the SPD include the provider network listing, prescription coverage explanations, coverage limitations or exclusions, prerequisite steps for pre-approvals or referrals for care, and more. Reading through the plan specifics requires diligence, but it avoids unpleasant surprises in accessing and affording care after enrollment. It also ensures that families select the best plan for their budget and anticipated healthcare needs in the coming year.
Connecting with a Health Insurance Broker or Navigator
The health insurance market provides families with numerous plan options, each with its own set of coverage considerations that can be difficult to weigh when deciding on the best plan. Working with an independent health insurance broker or navigator can provide professional guidance tailored to a family’s specific needs and circumstances, allowing them to identify affordable coverage options.
These experienced professionals stay up to date on market trends and changes, as well as complex state and federal healthcare rules and regulations. An independent broker or navigator serves as an advocate for families as they make health insurance decisions. Their insights and oversight give you more confidence in selecting a tailored, sensible health plan for your family.
Conclusion
When choosing health insurance, families must consider a variety of factors, including access to care, provider flexibility, monthly costs, and out-of-pocket expenses. Families can secure needed medical coverage at the best overall value aligned with their healthcare priorities and budget by understanding different plan types, carefully evaluating plan details, and seeking advice from a health insurance professional.
Taking the time to do your research upfront prevents you from choosing the wrong plan and incurring higher long-term costs due to confusion about health insurance policies and provider access. Through research, analysis, and collaboration, families can actively select the best health insurance for their needs that pays off when care is truly required.
