How to Choose Health Insurance: Your Step-by-Step Guide – NerdWallet

You typically have a limited amount of time to choose the best health policy design for your family, but rushing and picking the incorrect coverage can be dearly-won. here ’ s a start-to-finish scout to help you find low-cost health indemnity, whether it ’ s through a state or federal marketplace or through an employer.

Step 1: Choose your health insurance marketplace

How you shop for health policy will depend on what ’ s available to you.

If your employer offers health insurance

Most people with health insurance get it through an employer. If your employer offers health indemnity, you won ’ t need to use the politics indemnity exchanges or marketplaces, unless you want to look for an alternative plan. But plans in the marketplace are likely to cost more than plans offered by employers. This is because most employers pay a fortune of workers ’ policy premiums.

If your employer doesn’t offer health insurance

Shop your state ’ s on-line marketplace, if available, or the federal market to find the plan that ‘s best for you. Start by going to HealthCare.gov and entering your ZIP code. You ’ ll be sent to your state ’ south commute, if there is one. Otherwise, you ’ ll use the union marketplace. You can besides purchase health policy through a private exchange or immediately from an insurance company. If you choose these options, you won ’ t be eligible for premium tax credits, which are income-based discounts on your monthly premiums.

Step 2: Compare types of health insurance plans

You ’ ll meeting some rudiment soup while shopping for the best health indemnity plan. The most common types of health policy policies are HMOs, PPOs, EPOs and POS plans. What you choose will help determine your out-of-pocket costs and which doctors you can see.

Comparing health insurance plans: HMO vs. PPO vs. EPO vs. POS

plan type Do you have to stay in-network to get coverage ? Do procedures & specialists require a referral ? snapshot :
HMO : health sustenance organization Yes, except for emergencies . Yes, typically . Lower out-of-pocket costs and a chief sophisticate who coordinates your wish for you, but less exemption to choose providers .
PPO : prefer supplier administration No, but in-network worry is less expensive . No . More supplier options and no want referrals, but higher out-of-pocket costs .
EPO : exclusive provider organization Yes, except for emergencies . No, typically . Lower out-of-pocket costs and normally no want referrals, but less exemption to choose providers .
united states post office : point of service plan No, but in-network concern is less expensive . Yes . More supplier options and a primary repair who coordinates your care for you, with referrals required .
design type snapshot
HMO : health maintenance organization Lower out-of-pocket costs and a elementary doctor who coordinates your care for you, with referrals required to see a specialist. You must stay in-network except for emergencies .
PPO : prefer provider administration More provider options and no needed referrals, but higher out-of-pocket costs. You can go out of network, but care will be more expensive .
EPO : exclusive provider organization Lower out-of-pocket costs and normally no needed referrals, but less exemption to choose providers. You must stay in-network except for emergencies .
po : point of overhaul plan More provider options and a primary repair who coordinates your manage for you, with referrals required to see a specialist. You can go out-of-network, but caution will be more expensive .

Look for a summary of benefits

Online marketplaces normally provide a connect to the summary of benefits, which explains all the plan ‘s costs and coverages. A supplier directory, which lists the doctors and clinics that participate in the plan ’ s network, should besides be available. If you ’ rhenium going through an employer, ask your workplace benefits administrator for the compendious of benefits.

Weigh your family’s medical needs

attend at the amount and type of treatment you ’ ve received in the past. Though it ’ s impossible to predict every aesculapian expense, being mindful of trends can help you make an inform decision.

Consider whether you want a referral system of care

Plans that require referrals

If you choose an HMO or POS plan, which require referrals, you typically must see a basal care doctor before scheduling a operation or visiting a specialist. Because of this necessity, many people prefer early plans. however, by limiting your choices to providers they ‘ve contracted with, HMOs do tend to be the cheapest type of health plan. A benefit of HMO and POS plans is that there ’ s one primary doctor of the church managing your overall aesculapian wish, which can result in greater familiarity with your needs and continuity of aesculapian records. If you do choose a POS plan and go out-of-network, make sure to get the referral from your sophisticate ahead of clock time to reduce out-of-pocket costs. ( You can not go out-of-network with an HMO unless it ‘s an emergency. )

Plans that don’t require referrals

If you would quite see specialists without a referral, you might be happier with an EPO or a PPO. ( EPOs typically do n’t require a referral, but some do, so read the finely print. ) An EPO may help keep costs gloomy american samoa long as you find provider in-network ; this is more probably to be the case in a larger metro area. A PPO might be better if you live in a outback or rural area with limited access to doctors and care, as you may be forced to go out-of-network.

What about an HDHP with a health savings account?

A high-deductible health plan, or HDHP, can be any one of the types of health indemnity above — HMO, PPO, EPO or POS — but follows certain rules in order to be “ HSA-eligible. ” These HDHPs typically have lower premiums, but you pay higher out-of-pocket costs, specially at first. They ‘re the only plans that qualify you to open a health deliver account, or HSA, which is a tax-advantaged report you can use to pay health care costs. If you ’ ra interested in this arrangement, be certain to learn the ins and outs of HSAs and HDHPs first.

Step 3: Compare health plan networks

Your health indemnity “ network ” refers to the checkup providers and facilities your health plan has contracted with to provide your care.

Why does the network matter?

Costs are lower when you go to an in-network repair because indemnity companies negotiate lower rates with in-network providers. When you go out-of-network, those doctors don ’ t have agreed-upon rates, and you ’ re typically on the crochet for a higher parcel of the cost.

Do you have preferred doctors?

If you want to keep seeing your stream medical providers, make certain they ’ ra in the provider directories for the plan you ’ re considering. You can besides ask your doctors directly if they take a finical health plan.

Is a large network important?

If you don ’ t have a prefer doctor, it ‘s probably a estimable mind to look for a plan with a bombastic network so you have more choices. A larger net is particularly crucial if you live in a rural community, since it ‘ll give you better odds of finding a local repair who takes your design. Eliminate any plans that don ’ t have local in-network doctors, if possible ; you may besides want to eliminate those that have very few supplier options compared with other plans.

Step 4: Compare out-of-pocket costs

out-of-pocket costs ( that is, costs other than your monthly premium ) are another samara circumstance. A plan ’ s summary of benefits should distinctly lay out how much you ’ ll have to pay out of pouch for services. The federal on-line market offers snapshots of these costs for comparison, as do many state marketplaces.

Know your health insurance terms

It ’ s utilitarian to know the definitions of some identify health indemnity terms :

  • Copay : This is a flat fee ( such as $ 20 ) that you pay each time you receive a health worry service or procedure .
  • coinsurance : This is the share ( such as 20 % ) of a medical charge that you pay ; the rest is covered by your health policy plan .
  • deductible : This is the amount you pay for covered aesculapian care before your indemnity starts paying .
  • out-of-pocket utmost : This is the most you ’ ll yield in one year, out of your own pouch, for covered health care. once you reach this maximal, your insurance pays the rest .
  • out-of-pocket costs : These are all costs above a plan ‘s premium that you must pay, including copays, coinsurance and deductibles .
  • premium : This is the monthly measure you pay for your health policy plan .

Higher premiums, more coverage

In general, the higher your premium, the lower your out-of-pocket costs such as copays and coinsurance ( and vice versa ). A plan that pays a higher share of your medical costs, but has higher monthly premiums, may be better if :

  • You see a primary coil doctor or a specialist frequently .
  • You frequently need emergency care .
  • You take expensive or brand-name medications on a even basis .
  • You ‘re expecting a baby, plan to have a baby or have humble children .
  • You have a planned operating room coming up .
  • You ’ ve been diagnosed with a chronic stipulate such as diabetes or cancer .

Lower premiums, higher out-of-pocket

A plan with higher out-of-pocket costs and lower monthly premiums might be the better choice if :

  • You can ’ triiodothyronine afford the higher monthly premiums for a plan with lower out-of-pocket costs .
  • You ‘re in good health and rarely see a doctor .

Step 5: Compare benefits

By this step, you ‘ll likely have your options narrowed down to barely a few plans. here are some things to consider next : Check the telescope of services Go back to that drumhead of benefits to see if any of the plans cover a wider setting of services. Some may have better coverage for things like physical therapy, richness treatments or mental health care, while others might have better emergency coverage. If you skip this quick but significant pace, you could miss out on a plan that ’ south a lot better suited to you and your class.

Address any lingering questions

In some cases, calling the plans ’ customer overhaul line may be the best way to get your questions answered. Write your questions down ahead of fourth dimension, and have a write or electronic device handy to record the answers. here are some examples of what you could ask :

  • I take a specific medication. How is that medication covered under this plan ?
  • Which drugs for my condition are covered under this plan ?
  • What motherliness services are covered ?
  • What happens if I get vomit while traveling overseas ?
  • How do I get started signing up, and what documents will I need ?

Nerdy tip:

Don’t forget to discontinue your old plan, if you have one, before the new one starts.

Summary: How to choose health insurance

here ’ s a quick recapitulate :

  1. Go to your on-line health policy market and view all of your plan options .
  2. Decide which type of health insurance plan — HMO, PPO, EPO or POS — is best for you and your family, and whether you want an HSA-eligible plan.
  3. Eliminate plans that exclude your favored doctor or that do n’t have local doctors in the provider net .
  4. Determine whether you want more health coverage and higher premiums, or lower premiums and higher-out-of-pocket costs .
  5. Make certain any design you choose will pay for your unconstipated and necessary care, like prescriptions and specialists .
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