To make an informed decision regarding your health insurance coverage, you need to understand each plan available to you and be able to compare them to each other. Here are four things you should know about health insurance that can help you make sound decisions regarding your coverage.
1. Common Costs
When you choose an insurance plan, you must consider the costs and how they will affect your budget. Costs such as deductibles, copays and coinsurance are all common aspects of insurance plans, but the amount of each cost will vary between plans, providers and even states. You’ll also pay a premium each month, either directly to your provider or out of your paycheck. Compare these costs between each plan available to you to determine which is best for your needs. For example, if you’re based in Massachusetts and seeking coverage, you should compare Massachusetts health insurance rates to start the decision-making process.
2. Marketplace Plan Types
There are four types of insurance marketplace plans: preferred provider organization (PPO), exclusive provider organization (EPO), point of service (POS) and health maintenance organization (HMO). When you have a PPO, you’ll pay far less when you see in-network healthcare providers. Seeing providers outside your network is allowed, but you may need to pay an additional fee. An EPO is a managed care plan, which you can only use in-network unless there’s an emergency. POS plans, like PPOs, cost less if you use in-network healthcare providers, but you can see out-of-network specialists with a referral for no extra cost. HMO plans are useful for general wellness and preventive care, but also tend to restrict you to in-network healthcare providers. Generally, you’ll only be able to see healthcare providers who work for the HMO unless it’s an emergency. HMOs also tend to be heavily geographically-based, meaning you need to live within their service areas to be eligible for these plans.
3. Why Insurance Is Necessary
Health insurance is a tool meant to limit the risk of your responsibility for high expenses in the event of an unexpected injury or illness. It’s also a measure to mitigate the costs for various routine tests and examinations that go along with preventive medicine. When you have an insurance plan, you’re relatively cushioned from high bills for medical care from annual physicals to emergency surgeries and everything in between.
4. Health Savings Accounts (HSAs)
An HSA is an aspect of certain eligible high-deductible health plans (HDHPs). You can add money, typically a percentage of your paycheck, to your HSA like you would any savings account, but you use that money to pay for your out-of-pocket healthcare expenses. These costs may be higher than they would be for other health insurance plans, but HDHPs compensate for this by featuring much lower premiums.
These and other aspects of health insurance will all factor in the decisions you make regarding your coverage. As long as you understand the basics of health insurance coverage, you’ll be able to compare plans and consider their benefits and detriments to you before you make a decision.