Choosing a Health Insurance Plan That Is Right for You

Choosing a health insurance plan can be complicated. You have to consider many different aspects of the plan and the medical care you typically need. Picking the right plan gets you the coverage you need at a price that fits your budget.

If you need help choosing a health insurance plan, learn your options and other considerations to make.

Understanding Health Insurance Vocabulary

You may not be familiar with some of the common terms you’ll come across while searching for health insurance. Here’s a quick health insurance plan glossary to get you started:

• Monthly premium: The premium is the cost of the plan whether you use medical care or not. In some cases, the premium will be reduced if you qualify for a tax credit.
• Deductible: The deductible is the amount of money you’ll have to pay before the insurance will pay for services, except for preventative care.
• Out-of-pocket maximum: The out-of-pocket maximum is the highest amount you’ll have to pay for qualified medical care in the year. After you reach this amount, the insurance company will cover the rest. This number can vary by thousands of dollars, so it’s important to consider.
• Copay: Your copay is a set amount you have to pay for health services. There could be different amounts for primary care, specialists and emergency care. For example, you may have to pay $20 for doctor’s visits and $40 for specialists.
• Coinsurance: Coinsurance is a percentage rather than a set amount. For example, you may be required to pay 30% for emergency services.
• In-network: Different doctors, healthcare facilities and hospitals work with different insurances. An in-network doctor would be one that works with your insurance. In most cases, you need to find in-network care for the insurance company to pay.

Types of Health Insurance Plans

There are various health insurance plans that have different advantages and disadvantages. These are general descriptions of each plan, so keep in mind that the details may vary depending on your specific options. The most common plans are HMOs and PPOs, but other types may be better for you.

Compare health insurance plans to understand what’s available:

1. Health Maintenance Organization (HMO)

An HMO plan often has lower premiums and lower out-of-pocket costs but fewer provider options. Healthcare providers and medical facilities that are part of an HMO sell medical services for a fixed price.

You are required to have an in-network primary care provider (PCP) who is responsible for coordinating your care and issuing referrals to in-network specialists. If you have an HMO, you can only receive coverage for in-network doctors and facilities.

Advantages

You might choose an HMO plan for these advantages:

• Your out-of-pocket costs will be lower
• Your monthly premium will be lower
• Your PCP coordinates care
• You likely won’t need to file claims
• You’ll be covered out of network in case of an emergency

Disadvantages

Keep these drawbacks of HMOs in mind:

• You have fewer providers to choose from
• You must stay in network, except for emergencies
• You typically need a referral from your PCP

2. Preferred Provider Organization (PPO)

A PPO health insurance plan allows more flexibility in choosing providers and even allows you to go out of network. This means you have more responsibility in managing your own care, as referrals aren’t required. This can be a good option for people who want to choose their own providers and specialists. In-network providers will still be less expensive, however, so you will still need to find out more about which doctors and facilities are in network.

Advantages

A PPO offers these benefits:

• You gain more provider options
• You don’t need referrals
• You can go out of network, but in-network care is less expensive

Disadvantages

Keep these potential drawbacks in mind:

• You’ll have higher premiums
• You’ll have higher out-of-pocket costs
• You take on more responsibility to coordinate your care

3. Exclusive Provider Organization (EPO)

An EPO plan offers a local network of providers and facilities and does not require you to get a referral for care. You have to stay in network, but you don’t need to select a primary care provider and wait for referrals.

Advantages

An EPO plan offers these advantages:

• You often have lower out-of-pocket costs
• You’ll be covered out of network in case of an emergency
• You don’t need a referral from a PCP

Disadvantages

Note the possible drawbacks of an EPO plan:

• You have less freedom to choose providers
• You must stay in network, except for emergencies
• You’re restricted to an exclusive network

4. Point of Service Plan (POS)

When you choose a POS health insurance plan, you start by selecting a PCP like with an HMO plan. But like a PPO plan, you are able to go out of network for care.

Advantages

Benefits of a POS plan include:

• You have more provider options
• Your PCP coordinates care for you
• You can go out of network, but in-network care is less expensive

Disadvantages

These are the drawbacks of a POS plan:

• You need referrals
• You’ll need to file a claim if you see an out-of-network provider

5. Catastrophic Health Plan

If you are under the age of 30 or have a hardship or affordability exemption, you may be able to purchase a catastrophic health plan. This type of plan may be right for you if you don’t expect to use medical services but want to be prepared if there is an emergency.

A catastrophic plan offers lower premiums and free preventative care but a higher deductible that you must reach for other care to be covered. If you are eligible for a catastrophic health plan, you will see them on the marketplace and be able to compare them to the other plans available to you. However, subsidies can’t be applied to catastrophic plans.

Advantages

The benefits of a catastrophic plan include

• You have a lower monthly premium
• You get coverage for preventive services and emergencies

Disadvantages

The downsides of a catastrophic plan include:

• You can only get this plan if you’re under 30 years old or meet the hardship or affordability exemption
• You’ll likely have the highest deductible with this plan

Tiered Plans Explained

Plans available are shown with different tiers — bronze, silver, gold and platinum. The tiers indicate how much they cost and how much they cover. Generally, you can get medications, primary care visits and specialist visits at a discounted rate or for a discounted amount. For other costs, you need to meet a deductible before the insurance company will pay their part of the bill.

Determine the best health insurance for you based on the metallic plans:

• Bronze: After you meet your deductible, the insurance company will pay 60% of all qualified costs.
• Silver: After you meet your deductible, the insurance company will pay 70% of all qualified costs.
• Gold: After you meet your deductible, the insurance company will pay 80% of all qualified costs.
• Platinum: After you meet your deductible, the insurance company will pay 90% of all qualified costs.

Plans of different tiers will have different deductibles, out-of-pocket maximums and different benefits. If you qualify for a cost-sharing reduction, you must choose a plan that is of Silver-tier or better.

How to Find a Health Insurance Plan

There are different ways to find the health insurance plans available to you. If your job offers health insurance benefits, you should look there first. Otherwise, you can find plans by going to the federal marketplace at Healthcare.gov. You can also look for an agency in your state.

Through Your Employer

Plans offered by your employer are likely cheaper than a plan you can find elsewhere. This is because your employer will often pay a portion of your premium. Your company insurance marketplace is where you’ll find your options. Talk with your HR representative if you need help finding the available plans.

Healthcare.gov

If you are looking for an alternative to employer-provided health care or your job doesn’t offer health insurance, you can find it through government resources.

Start by going to Healthcare.gov and typing in your state. If your state has its own marketplace, you will be directed there. Otherwise, you will be able to search the federal marketplace for plans. Healthcare.gov can also help you find out if you are eligible for Medicaid.

A Health Insurance Agency

A health insurance agency helps you get a quote and find plans that are right for you. Licensed agents know all there is to know about insurance in your state, and their goal is to help you understand your options. If you’re still having trouble understanding health insurance plans, speaking to someone at an agency in your state can help.

Which Insurance Plan Is Best for Me?

Choosing a health insurance plan is all about you and your family, if you also need coverage for them. People have different preferences for their premiums and coverage levels. To determine the best health insurance plans for you, you should:

Consider Your Medical Needs

The most important factor to consider is the medical needs of you and your family. This will help you determine the amount of coverage that is best. If you or a member of your family is on a lot of prescriptions, needs regular medical care or is at risk for medical problems, it would be best to get a higher-level plan. Usually, plans with higher premiums will cover more services, but you will have to check. Do a little research to see what plans cover your prescriptions and the type of care typically needed.

If you have any planned surgeries or other big procedures, you would want to find a plan with a lower deductible or out-of-pocket maximum. If you frequent urgent care or the ER, you will need to check the coverage levels for that.

If you have no medical conditions and only visit the doctor for your annual checkup but want to be covered in case of an emergency, find a plan with a low premium, low out-of-pocket maximum and higher copays. If you want a plan that offers good coverage for mental health services, that could limit your options.

Make a list of what is most important to you and use it to narrow down your options when sifting through the available plans.

Check Your Budget

When choosing a plan, you will have to decide between many different levels of benefits. Premiums can range from hundreds of dollars a month or more. Look into your finances and decide what amount is appropriate for your family. Then you will be able to compare the plans that fit within your budget.

Remember that you may qualify for a tax credit that can reduce your monthly premium.

Discover Your Options

After considering your needs, your budget and any applicable credits, it’s time to sort through your options. If you are searching your company marketplace, you may only have a few options. But if you are looking on your state exchange or the federal marketplace, you will have dozens of plans to look through. There are sorting features you can use to help narrow down your options.

Remember to consider what type of plan you want. Does an HMO, PPO, EPO or POS plan better fit your needs? Or are you eligible for a catastrophic plan?

Find Doctors in Your Area

After you narrow down your options, you will need to double-check that it meets your needs. If you have a specific doctor you want to see, make sure they are in network for that plan. If you don’t have a doctor yet, make sure there are in-network doctors close by. If the closest in network primary care doctor is too far away for you, cross that plan off your list. Also, double-check that the plan covers your prescriptions.

Final Tips for Choosing a Health Insurance Plan

Whether this is your first time looking for a plan or you want to change from your current one, these final tips can help your search:

• Choose a plan through a trusted service: Avoid considering cheap plans on random websites or sponsored links that may appear when searching for health insurance.
• Understand open enrollment: Open enrollment typically ranges from November to January of the next year. That’s the only time you can apply for a health insurance plan, unless you qualify for special enrollment.
• Review your plan every year: Review your options every year, even if you’re happy with your current plan. Many things change year to year, and a similar plan may be available for less than your current one. It’s usually worth checking out. Remember that you are required to report any changes in income or family size.
• Weigh your options: If you find two plans that seem almost the same, check if they offer any value-added benefits. This can be something like access to a mobile app, discounts, 24/7 customer service or a nurse phone line. While these things won’t be the main factors to consider, they can help you choose between two similar plans.
• Get help choosing a plan: If you are having trouble navigating your state’s exchange or the federal one, look for help. Some states will have additional resources for people searching for insurance. There may be local agents or an alternative application that can help you find the best insurance for you without wasting your time or frustrating you.

Find a Plan for You Through Health for California

Health for California is a way for California residents to purchase insurance through the state exchange. Our process is faster and easier than other methods, with a user-friendly application and agents that are available to answer your questions. We can help you find a plan that suits your needs and fits your budget. Our agents are licensed by the California Department of Insurance as well as by Covered California — the California health insurance exchange.

Get a quote for what you can expect to pay for health insurance in just 30 seconds!