Health coverage is typically confusing. Most of us pick a plan and forget about it until we need it. The Affordable Care Act (ACA) has made it easier to choose a plan. But we have to get past the emotional aspect of change. Once we do, there should less surprises at claim time.
Easier said than done…
Why? Emotions distorts logic and forces you to make impulse decisions.
Some people pick coverage based on what their perception of health insurance coverage should be. This could lead you into financial trouble. Some will pick with their emotions and will find themselves with a very unaffordable plan, health insurance tax credit subsidies or not. Then you will lose your coverage by not being able to afford the payments.
Price is important, but not the only thing. We have to find a balance between coverage and cost. Lets set a reasonable expectation.
Choosing a health plan is more of a math problem than a benefits problem.
In a perfect world, with money not being an issue, you would choose the lowest out-of-pocket. But this could be a very expensive option. Then for others, having a $6,000 deductible could be very scary. But so is not having insurance.
How do you make a good informed decision when choosing your health insurance?
Here are a few things that you can do during your review:
- Review your medical expenses and usage in the past 24 months.
- Review any anticipated expenses that you are aware of. This could be current or foreseeable treatment; a birth of a child; etc.
- Analyze if it is worth the premium difference to add coverage, i.e. co-pays for doctor visits and the prescription drugs card.
If you are single, it may cost about $50.00 – $100.00 more per month to have doctor visit co-pay with a co-pay drug card. To have this kind of first dollar benefit of co-pays at the doctor’s office and pharmacy adds value to the plan, hence the premium increase. Does the $100.00 per month justifiable for what you would be using?
- If yes, then it is worth adding the coverage.
- If no, then take the savings and put it into a Health Savings Account, or to better use. Just keep in mind you are saving money per month when you do use services and the service fees are applied to your deductible.
- Yes – it is insurance. Some may want to pay the difference in premium just for the likelihood they may need the coverage. If that is the case, then add it. It is worth it to you.
Another area to analyze is the choice of networks. Some insurance companies charge less per month to go to their smaller network of doctors and hospitals.
Some policyholders will absolutely require they have certain hospitals or doctors. If you are unwilling to move or review other choices, then you will pay the higher fee for the bigger/different network.
Being a little flexible on doctor choices could save you thousands of dollars per year. After all, a true emergency is covered out-of-network, but only for the emergency. As soon as you are stable you have to get out of dodge and move to an in-network facility. The savings could be beneficial to you and your family.
In some cases, you could be spending about $2,000 more per year just to keep your doctor. This is, of course, before you even use your benefits. Ask yourself, “is it worth it?”. If it is, then go with it. If it is not, remain flexible and the savings will come.