Saturday, February 7, 2015

Finding the Right Health Plan

The array of health insurance options is broader than it’s ever been for consumers in most states, a development that’s encouraging and a bit intimidating at the same time.
In the wake of the Affordable Care Act, often dubbed Obama Care, Americans can choose to sign up for a policy directly through a carrier or on their state’s insurance exchange. That can mean a lot of plans to sift through, some of which look very different from one another.
To ensure the best choice, be sure to prioritize your needs ahead of time and determine how each plan stacks up. Here are some steps to follow to help you navigate the buying process.
1) Determine your insurance needs
Some consumers start looking for plans with a single criterion in mind: finding the lowest premium. But keep in mind that with insurance, like anything, you get what you pay for. A cut-rate plan might look appealing at first glance, but becomes pricey when it doesn’t cover a particular hospital or a certain test you need.
Before you start your search, write down a few of the things you value most. Maybe it’s the ability to keep a doctor that you really like. Perhaps there’s an elective procedure you’re considering that only some plans pay for. Or it could be finding a “sweet spot” between the monthly premium and and the deductible you’ll have to meet before insurance kicks in.
2) Know your options  
Today, consumers who buy individual coverage have two alternatives. They can either buy a policy through their state’s health insurance exchange (otherwise known as the “marketplace”). Or they can buy plans directly through an insurance company.
There are two characteristics of the exchange that are worth bearing in mind. First, plans sold through the marketplace have to cover certain “essential health benefits.” These include ambulatory care, emergency services, hospitalization and maternity care. So in some cases, plans on the exchange might offer more comprehensive coverage than those sold separately.
Secondly, the only way to take advantage of income-based insurance subsidies is through the exchange. If you make less than 400% of the federal poverty level, you’re entitled to some relief in the form of a tax credit. Currently, you’d have to make under $46,680 a year as an individual – or under $95,400 for a family of four – to qualify. Filling out an application will also tell you if you’re a candidate for Medicaid, a joint state and federal program that provides affordable care for low-income Americans.
That’s not to say plans sold outside the exchange can’t be a better deal in some situations. Because there are fewer federal guidelines regarding what they have to cover, these policies can be a bit cheaper – especially if you don’t qualify for a tax credit.
If finding all the possible health plans in your state seems like a daunting task, consider getting some help from an insurance broker. They can help you identify options on and off the marketplace. And since they’re compensated by the insurers, it won’t cost you to use their services.
3) Find out what’s covered
Unfortunately, obtaining insurance isn’t like buying a TV, where you select and model and simply compare prices at different retailers. Plans can vary tremendously in terms of what services they cover. The process is a little easier with exchange-based plans, which all offer the same essential health benefits. But even here, some pay for additional services as well.
Insurance products also differ in terms of which doctors and hospitals are included in their network. While some policies allow you to choose virtually any provider, others are more restrictive. If there’s a certain primary care doctor or specialist you’d like to use, it pays to do your research ahead of time and see whether they’re fully covered.
4) Look at the complete cost
When evaluating different insurance options, it’s easy to be dragged in by the plan with the lowest monthly premium. But chances are, you won’t be getting as much help from the carrier if something unexpected happens. If you’re young and healthy, that might be a risk you’re willing to take. However, some consumers sleep easier knowing they’re covered if they need to stay in the hospital overnight or have surgery.
There are five basic features to keep in mind when considering insurance prices:
  • Premium: The fixed amount you pay every month to keep the policy in effect.
  • Deductible: How much you’ll have to pay for medical services before insurance kicks in.
  • Copayments: The amount you have to pay out-of-pocket right when you receive a service.
  • Coinsurance: The percentage of health care costs you have to shoulder, even after the deductible has been met.
  • Out-of-Pocket Maximum: The upper limit of how much you have to personally pay for health services within a given year. Once the maximum is reached, insurance covers the remainder of costs.
To get the best deal, you really need to take all these factors into account. Depending on what level of coverage you’re comfortable getting, look for a plan that’s likely to offer the lowest overall cost.
The Bottom Line
In most cases, it’s worth looking at plans sold on and off the exchange to see which offers the best value. The marketplace’s open enrollment period is just three months long, so make sure you take advantage while the window is open.

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