How to Shop For Health Insurance

Starting January 1, everyone will have to have some kind of health insurance. For many people who get health insurance through their work or have been on a qualifying plan (that their insurer hasn’t canceled) since March 2010, there’s no need to shop for new health insurance. For many people, though, this may be the first time they are shopping for insurance. If that describes you, here are a few tips.

Understand the Types of Insurance

Health Maintenance Organizations (HMOs) and Exclusive Provider Organizations (EPOs): These plans generally limit you to getting care only with doctors who belong to the plan. If you get care outside the plan, you may have to pay the full cost of service. The main difference between the plans is that in HMOs your primary care doctor is your gateway to all specialists, while in EPOs, you can see specialists without a referral.

Preferred Provider Organizations (PPOs) and Point-of-Service (POSs): These allow you to choose whether you want to go with a network doctor for a lower rate or an out-of-network doctor for a higher rate. PPOs generally work with a primary care doctor.

High Deductible Health Plan (HDHP): These plans have high deductibles that may increase your out-of-pocket costs if you need more care, but have lower premiums.

Catastrophic Health Insurance Plan: These are available only to people under 30 and a few in special circumstances. These are basically very high deductible health plans.

Understand the Payment System

Deductible: This is the amount you must pay out-of-pocket before your insurance kicks in, excluding coverage for covered preventive care, which is provided at no charge.

Coinsurance: Once your insurance kicks in, this the share you will be expected to pay for any health services until you reach your out-of-pocket maximum.

Copay: A specific charge that is related to an individual service that will usually have to be paid at the time of service.

Maximum Out-of-Pocket: This is the maximum amount that you can be made to pay for health services during the year. This includes your deductible, coinsurance, and copayments. Also called cost sharing limit.

Shop on the Exchange and Off It

In Colorado, we have a state-run exchange that allows you to shop for health insurance from all providers and tells you whether you qualify for subsidies. You can only get subsidies if you shop on the exchange, but if you don’t qualify for subsidies, you can shop with individual providers or delegate to an insurance agent who will do the shopping for you, for a price.

Shop Based on the Expected—and the Unexpected

When shopping for insurance, try to pick a plan that won’t be disruptive to your current healthcare situation, e.g., lets you keep your current doctor.

When you are shopping for insurance, it’s easy to assume that nothing will go wrong and pick the plan that seems the cheapest based on lower premiums. However, it’s important to test a scenario in which something goes very wrong, such as if you have a major accident or are diagnosed with a serious illness. Balance the cost assuming that you have four or five years without a major problem and see how the two costs compare, then pick the one that allows you to get the care you need at the lowest cost.

For more advice about important healthcare decisions, please contact Dr. Andy Fine in Littleton today.

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