Health insurance is now a vital part of our lives. With the exorbitant costs of medical care today, owning coverage is as essential as food and shelter.
The difficulty many people face is knowing what sort of cover is best for their circumstances. With so many options, it’s perfectly understandable.
Here’s a guide to help you choose a health plan that’s right for you, regardless of whether you or your employer pays for it. Knowing these few things will make it easier for you to come to an informed decision.
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Health insurance plans fall into four categories, which are Platinum, Gold, Silver, and Bronze.
Please note that these classifications aren’t related to the quality of care you’ll receive. They refer to how you and your insurer will divide costs.
The sharing ratio between the insurance company and you is as follows:
- Platinum – 90:10
- Gold – 80:20
- Silver – 70:30
- Bronze – 60:40
Total Healthcare Cost
When you’re working out the overall expenditure related to your care, know that it doesn’t end with the premiums you’ll pay. You must also take into account the following:
Co-payment: A copay is usually a fixed rate you’ll pay for doctor visits, prescriptions, and other medical care. The amount applies even if you haven’t used up your deductible yet.
Deductible: This is the sum you’ll have to fork out for healthcare services covered by your policy before your insurer starts to pay. If your policy specifies $5,000, that’s how much it’ll cost you before your insurance company takes over.
Coinsurance: In some cases, after you’ve reached your deductible, you’ll share the remaining costs with your coverage provider. Be aware that this feature only applies to covered expenses. You’re responsible for expenditure that falls outside the gamut of your policy.
Out-of-pocket limit: The maximum it’ll cost you for insured aid provided in a year. Your insurance company pays every covered expense beyond that amount.
Some plans cover preventive services fully, meaning you won’t be liable for anything.
In-Network vs. Out-of-Network Providers
It’s good to know what in-network and out-of-network providers are because some plans have two sets of deductibles, co-payments, coinsurance, and out-of-pocket maximums for each of them.
The former refers to physicians and medical facilities that offer special rates to your insurer. The other doctors and hospitals fall into the latter category and usually charge higher fees.
Ideally, when choosing a plan, it makes financial sense to ensure that the care you’d prefer is part of your policy group. However, take note that you may have to travel outside of where you live to receive more affordable services.
Types of Plans in the Marketplace
Besides the four l categories, the different types of health insurance plans designed to meet your unique needs include:
- Exclusive Provider Organization (EPO): The coverage extends only to in-network providers, except in an emergency.
- Health Maintenance Organization (HMO): This policy restricts you to care provided by doctors who work for or with the HMO. It generally doesn’t pay for out-of-network services except in critical situations.
- Point of Service (POS): With this plan, you’ll pay less if you use medical practitioners that belong to the insurer’s group. You’ll need a referral from your primary physician before you consult a specialist.
- Preferred Provider Organization (PPO): The PPO is similar to the POS, except that you can visit healthcare professionals outside the insurance company’s circle without a referral. You’ll, however, have to bear an additional cost.
To Sum Up
When you shop for a health insurance plan, you must know your total cost of coverage. Pay attention to details such as premiums, deductibles, copays, coinsurance, and out-of-pocket limits when comparing policies.
The amounts will likely vary from what you’ll spend, but the estimates are useful for assessing the cover’s impact on your budget.