Selecting a plan: 5 questions to ask

Overview

Consider the big picture

It can seem a little overwhelming to try to understand all of your options for health insurance. Luckily, there are only a few things you need to consider when choosing the best plan for you and your family. It’s important to remember that no health insurance plan provides full coverage for every kind of medical care. The challenge is to find a plan that provides the right coverage for you and your family.

Question 1/5

What are your healthcare needs?

Make a list that includes all of your medications and the names of any doctors you see regularly or would like to see when you need medical care. Include the hospital and pharmacy that you’d like to use. List any diseases, disabilities or disorders that you’re getting treatment for. The same goes for your dependents or anyone else who will be covered by your plan. Be specific: for example, physical therapy, vision care, dental care, or counseling. You’ll also want to include any changes you anticipate in the near future, such as starting a family or retiring. Keep this list handy so that you can compare different plans using the same criteria.

Question 2/5

Do you know HMO from PPO?

These are the two major types of health insurance plans -- HMOs and PPOs -- and it’s important to understand the difference between them. It’s not that one is better than the other, but which doctor you can see, how much it costs, and how you pay varies quite a bit between them.

An HMO plan requires you to choose from a list of doctors and specialists, known as the “network.” You choose a primary care doctor (PCP) from that list. This doctor helps coordinate your overall medical care and must provide a referral if you need to see an “in-network” specialist (one that’s on the list). HMOs don’t offer any coverage for care from a non-network physician, except for medical emergencies. HMO plans generally can provide coverage with a lower monthly premium (payment) than a PPO.

PPO plans have a broader network of providers (doctors, hospitals, etc.), and are more flexible about offering coverage for doctors and specialists who are not in the network. Also, PPO plans don’t require individuals to get referrals from their primary care physician in order to see a specialist. Having the freedom of a PPO can be important to those who prefer a broader selection of providers.

Question 3/5

What’s the overall cost?

You’ll want to understand four terms that are used to describe insurance coverage and payment: co-pay, deductible, coinsurance, and maximum out-of-pocket. Beyond the plan type (HMO or PPO), this information will help you further narrow your choices.

  • Co-pay is a fixed dollar amount that you pay when you receive a service that is covered by your insurance plan. For example, some services are available to you immediately through your insurance and only require a co-pay.
  • Other services require you to pay some of your medical bills before your insurance “kicks in.” This is called the deductible. Once you’ve paid your full deductible, your insurance will pay a set percentage of your covered medical expenses, and you’ll pay the rest.
  • Whatever your insurance doesn’t pay for after you pay the deductible is called your coinsurance.
  • Finally, the maximum out-of-pocket refers to the most you would have to pay, no matter what your medical expenses are in a given year. The maximum out-of-pocket is a cap on what you pay for co-pays, deductible and coinsurance.

Question 4/5

What’s your budget?

It’s important to do your homework and know how much you can afford before you start researching plans. Some individuals will want a plan that provides insurance benefits sooner (with lower deductibles). These plans will have slightly higher premiums. Some people prefer a higher deductible, or may choose an HMO plan with only in-network coverage in order to have a lower premium. Having a lower deductible can help people who may not have access to enough funds to pay for procedures or services that cost several thousands of dollars up front. On the other hand, having a higher deductible may be a good choice for people who live a healthy lifestyle and don’t anticipate the need for many procedures, services or medications. They may benefit from a lower premium. Knowing your budget allowance will help you choose a plan.

Question 5/5

What are the plan’s limitations?

Make sure the plan matches up with your specific needs. Ask questions about anything you don’t understand, and ask the same questions about each plan you’re considering so you can compare them using the same information. Use your list of healthcare needs from the first question and your budget from the fourth question to make sure you’ve made a thorough comparison of benefits and costs. Check the network of the plans you’re considering to be sure your desired doctors and hospitals are part of that network.

Using these steps will help you head in the right direction in finding the health insurance plan that’s best for your unique situation.

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This information is only a high-level summary of certain provisions of the health care law. This information does NOT attempt to summarize all provisions of the health care reform law. This information is not and should NOT be used as legal or tax advice; it should not be used as a basis for decisions regarding how the health care reform law will affect you and/or your business. Should you have any questions on how the health care reform law (including the high level summary of certain provisions of health care reform) will affect you and/or your business, you should seek professional advice from attorneys or other advisors.

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For Arizona residents: Insured by Humana Insurance Company. For Texas residents: Insured by Humana Insurance Company or offered by Humana Health Plan of Texas, Inc.

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