Posted by Elbret Bebla, November 12, 2019 (last updated on July 23, 2020)
Open Enrollment began on the first of November–but what does this mean for you?
Health insurance can be confusing... Maybe you’re thinking–what’s a PPO? How does my $4,000 deductible work? We’ve created a helpful guide to help you choose the right plan for you!
If your employer sponsors your health insurance, then now’s most likely the time for you to review the insurance plan options and select one. Choosing a plan can be overwhelming and confusing, but we’re right there with you to help you understand your options and select the plan that’s right for you. The path of least resistance is usually to choose the same plan that you currently have–if it ain’t broke don’t fix it.
However, taking some time to review your insurance spending over the last year to see what you spent on healthcare as well as looking forward to what you’re expecting in the coming year will allow you to pick a plan that’s the very best for you. Be sure to pay close attention to your premium, the monthly fee that you pay to make sure you’re covered, as this fee will be important to know when planning for how much you’ll be spending on health insurance in the coming year.
1. Select the health plan marketplace
Do you have health insurance options through your employer? If so, then you likely won’t need to review insurance options through the government insurance marketplace. If your employer plans don’t appear to be a good fit for you, then you’re still eligible to purchase a plan through the government marketplace, but it’s likely going to cost you a lot more since your employer won’t be paying a percentage of your monthly premium.
No health insurance through your job? Head over to HealthCare.gov to get started with selecting a plan. From there, you can enter in your location and you’ll be directed to your state’s marketplace website to review eligible plans for you.
2. Figure out which type of plan works best for you: HMO, PPO, EPO, IDK?
Health Maintenance Organizations (HMO)
HMOs usually have lower monthly premiums, and will give you a chance to choose a primary care physician (PCP) or automatically assign you to a PCP to care for most of your healthcare needs. Your PCP is going to be your new best friend, because in order to see any type of specialist, procedure, or service, you will need a referral from your PCP first. Your PCP can then refer you to a local specialist, imaging or diagnostic center that is contracted with your HMO network.
One thing to keep in mind is that if you elect to go straight to a specialist without first getting a referral from your PCP or see someone who is not in-network with you HMO plan, then you will be responsible for the entire cost of the visit. Emergency services are the exception, so you can still go to the ER in a true medical emergency.
This may be a great plan for you if you're able to select a hospital system or physician group that is contracted with your HMO network, you feel comfortable sticking to, and are happy with the specialists and facilities that you’d be referred to. HMO plans are known for getting you the care you need at a more affordable monthly cost.
Preferred Provider Organization (PPO)
PPO plans provide you with the most flexibility when it comes to choosing a medical provider and facility for imaging or tests. You are not required to select a PCP and will not have a PCP assigned to you. However, you can (and should!) see a PCP of your choosing, who is in-network with your PPO plan, but you will not have to go to them before you can be seen by a certain specialist or diagnostic facility.
With a PPO plan, you’ll likely have a wide variety of providers and facilities to choose from that you can access from your online health insurance portal. Your insurance plan’s website is usually listed on the back of your insurance card. When you call your insurance company to ask for in-network providers, they’re just reading from this list, so feel free to save yourself and your sanity from a two hour hold time and create an account through their portal.
A PPO plan is great if you’re interested in seeing specialists who are not contracted with any insurance plans or alternative or naturopathic providers, as they include out-of-network benefits. PPO plans help pay for care when you see a doctor who doesn’t take your plan though you will usually pay more of the cost of your visit. For example, you could have a plan that has a $300 in-network deductible, a pays 80% of the bill when the in-network deductible is met. Your plan then may also have a $600 out-of-network deductible, and pay 50% of the bill after the out-of-network deductible is met.
To take advantage of your out-of-network benefits, you can file a claim by completing an insurance company’s claim form, and sending it to them along with a bill from the visit. A PPO plan is a great option if you enjoy having autonomy and flexibility to seek care without referrals and across health systems and doctors’ offices, however, these plans tend to be more expensive than an HMO plan for example.
Exclusive Provider Organization (EPO)
With an EPO, you will have moderate freedom when choosing your doctors. These plans provide more flexibility than an HMO plan in that you don’t need a referral to see a specialist, but your insurance plan will not cover any visit that is outside of the physician network that you select. This means that while you don’t need a referral, you are limited to seeing doctors from a specified health network. EPO plans typically have lower monthly premiums than PPOs but higher than HMO plans.
Often, when you select a large, well respected hospital system, EPO plans can feel like having a PPO plan where you don’t need a referral to receive care from specialists as long as those specialists are within the system’s network.
POS plans require that you are assigned a PCP who will coordinate your care (like an HMO), but under some circumstances, will allow for out-of-network care like a PPO plan. The network of doctors you can see is relatively smaller compared to a PPO plan, but the costs for in-network care are lower, like in the HMO plan.
If you decide to visit a specialist outside of the plan’s network, there will be an additional cost, and you will have to file a claim with your insurance company. Both POS and EPO plans have smaller provider networks than a PPO plan, but a POS plan requires a PCP referral whereas an EPO plan does not.
3. What can I deduce from my deductible?
Your deductible is the amount you’ll pay for care before your insurance plan starts to chip in and cover some of the cost. You’ll pay the full price for most of your care until you reach this amount, unless you’re receiving preventative care, which is typically fully covered.
For example, if your insurance plan has a $2,500 deductible, then you're responsible for paying the first $2,500 of medical visits or services out of your own pocket. Then, once you meet your deductible, you’ll pay a copayment or co-insurance (in case you’re unfamiliar with these terms, we’ve got a primer for you here) for covered services after.
Many insurance plans have an individual deductible–this is the amount you’ll have to spend out of your own pocket before your insurance company will start chipping in to pay for a portion of your visits and services.
A family deductible includes all of the expenses for the family members who are on the same insurance plan. When this deductible is met, then all individuals on the plan can rejoice together, because then benefits (like lower co-insurance) kick in for everyone!
4. How much is this going to cost me? Your monthly premium
Your monthly premium is basically your monthly health insurance subscription so that you’re covered when you or someone in your family gets sick, injured, or needs to see a doctor. Although you are paying this monthly premium, there can still be other costs for care. For example, if you go to the doctor, you’ll likely also have bills from the doctor’s office, like a copay for the care you receive.
If your employer provides health insurance coverage, they typically pay a percentage of your plan’s monthly premium. If you are purchasing health insurance through your state’s health insurance marketplace, you may be eligible for tax credits and reduced premiums based on your income.
5. How much will I pay at my appointment? Your copay
A copay is the flat fee you’ll pay up front for services from your doctor. It’s usually collected at the doctor’s office, and varies depending on the service and the provider. For example, a copay for a medical service may be $30 for an office visit whereas a copay for a prescription may be $10.
Once you’ve hit your deductible, your co-insurance will kick in. Think of this as the cost you’ll split with the insurance company. You’ll pay a percentage of the cost of medical service, and your insurance will cover the rest.
Say you went to get a blood test, and the lab is in your insurance plan’s network. If you haven't met your plan's deductible, then you'd have to pay $150 for your visit. However, if you’d already met your deductible, then your co-insurance would kick in. Let’s say your co-insurance stated you were responsible for paying 20% of the bill, that would mean you’d only pay $20 (20% of $150) and your insurance provider would cover the rest.
It’s nice to know that it’s in your insurance company’s best interest for you to stay healthy. That’s why they make some preventative care available to you for little to no cost. For example, most plans will include a free annual physical to get you acquainted with a primary care doctor.
If you’re trying to figure out how much your copay is going to be, here’s a good rule of thumb: if your monthly premium is high, this means that you will have a lower copay for primary care, specialist, urgent care, and emergency room visits. If you have a lower monthly premium, you’ll generally have a higher copay.
6. For your consideration: FSA
An FSA, or flexible spending account, allows you to set aside part of your pre-tax income to cover your healthcare expenses.
There are a few different ways you can use the money that you’ve contributed to your FSA account. One approach is submitting a claim. After receiving a bill from your doctor, you can submit a claim online with your receipt from your medical expense and statement that it has not been covered by your plan. After you submit your claim, you will be reimbursed for that medical expense. Alternatively, some FSA plans issue debit cards that you can use to pay for health expenses in lieu of manually submitting claims.
The most you can contribute to your personal FSA per year is $2,650. Depending on your FSA, you can pay for certain medical and dental expenses included your deductibles, copays, medical equipment, prescriptions, and diagnostic services.
7. For your consideration: HSA
An HSA is a health savings account that offers more flexibility than an FSA. An HSA be combined with a high-deductible health plan and offers savings and tax advantages that, unlike your FSA, do not expire. Are you leaving your current employer and going somewhere else? That’s no problem, your HSA can be transferred with you from one job to another. Like an FSA, an HSA can be used to pay for deductibles, co-insurance, prescriptions, as well as dental and vision services.
Like the FSA, you are able to submit claims to your HSA or use a debit card issued in your name. You can remit payment for all of a portion of your IRS-qualified medical expenses with your regular credit card and submit a reimbursement months later with money from your HSA account.
Many people also use FSA and HSA fundings for alternative medicine or wellness (i.e. acupuncture, nutritional counseling) that are not typically covered by insurance, but be sure to check with your plan specifically to confirm that the services you’re interested in are eligible to be paid for from your HSA
In 2019, the maximum amount to contribute to an HSA account was $3,500 for an individual plan, and $7,000 for a family plan. For 2020 health insurance plans, the limit will go up a bit to $3,550 for individual plans and $7,100 for family plans.
While FSAs and HSAs have a lot in common (hello tax-free healthcare dollars!), a notable difference is how long the funds stay with you. You must use the money in your FSA account within the plan year, unless your employers allows an amount available that can carry over to the next year (usually a $500 limit). However, those HSA dollars are yours to keep as long as you continue to enrollment in an insurance plan that includes an HSA benefit.
8. I got all my doctors with me
If you have found a physician who you truly enjoy working with to manage your health and wellness, it’s a good idea to call them up to check which insurance plans his or her practice accepts while reviewing your new insurance plan options. That way, you can make sure that whichever plan you choose for the coming year you’ll hopefully be able to remain “in-network” (i.e. your plan is contracted with your favorite doctor).
If your doctor isn’t in in-network, you can still see them; however, you’ll have to file a claim with your insurance company so the visit can apply to your out-of-network deductible. Remember when you’re choosing insurance plans, that some don’t have out-of-network benefits, like HMO and EPO plans.
9. Riding solo
If you are uninsured, it can be helpful to call the doctor’s office that you’re considering up front to ask them what the “cash pay” or “self pay” rate is. This rate could be lower than the typical office visit amount that they would bill the insurance company. Do your research or call around to a few doctor’s offices to find which one seems like a good fit for you and your health goals.
If you are experiencing a rash, the sniffles, need stitches, or have the flu, you can also explore convenient urgent care options in your neighborhood by searching here.
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