It might seem like there’s nothing more confusing than choosing a health insurance plan. Insurance and health terms alike can seem like a foreign language. And all most consumers want is a plan that’s going to help keep them healthy without breaking the bank.
This week on “Take Care,” Erin Singletonhelps translate the complicated world of health insurance. Singleton is chief of mission delivery at the Patient Advocate Foundation, a national non-profit that helps individuals resolve issues related to their medical diagnosis.
When people think of health insurance, the first thing they may think of is cost. It’s expensive. That’s why Singleton says it’s important to educate yourself about the options and how insurance works.
“I think you should be looking at insurance the way you look at any other large purchase,” said Singleton. Just like buying a car or planning a vacation, you should create a budget. But, she says, keep in mind that your need for health insurance may not be as optional as some other things you purchase.
And, with the Affordable Care Act, everyone is now required to have health insurance of some kind – whether government provided or purchased – or face a tax penalty.
If you do not get the benefit of health insurance through the company you work for, Singleton says you should be aware that there is financial assistance offered to many people buying health insurance in the open marketplace, depending on household income. Then there is government assistance, such as Medicaid or CHIP (Children’s Health Insurance Program), which have been expanded under the ACA in many states.
Whether you are picking an insurance plan from employer options or on the open marketplace, it can be difficult to figure out what you can afford. First, says, Singleton, look at what health expenses you incurred over the last year, to give you an idea of what you spent, and what kind of coverage you need.
Then, research the plan – the full picture of the plan.
“As a good consumer, it’s important to become familiar with all aspects of plan,” said Singleton.
That means looking beyond just the premium cost. Singleton says one of the biggest mistake people make is just choosing the plan with the cheapest premium, and not looking at what co-pays, cost sharing or out-of-pocket costs are included. Singleton says particularly healthy people who have not utilized a health insurance plan much in the past can get caught in this trap.
For example, if your plan has a large deductible, and you have a health crisis at beginning of year, you’re going to have to pay that up front out of pocket. Maybe paying a little more for a premium is a better choice.
Kinds of insurance plans
There are essentially three types of plans that are most common – HMO, EPO and PPO.
HMO & EPO plans require you to pick primary health care physician, who manages your health care, and must be the one to refer you to specialists.
PPO plans generally are more flexible. You can make your own referral, but you do need to choose network provider for best coverage.
What you are guaranteed
Under the ACA, every plan must provide 10 categories of “essential health benefits.” They are:
- Outpatient & physician care
- Emergency services
- Hospitalization
- Maternity care
- Pediatric care
- Prescription coverage
- Rehabilitation care
- Laboratory service
- Prevention care
- Chronic disease management
