Choosing a health insurance plan that suits your needs is one of the more critical decisions you are likely to make. As such, you need to devote to it the careful consideration you rightfully deserve. Most people rely on their employee benefits for their health insurance. Self-employed professionals are required to purchase health insurance in an individual capacity. Your particular situation determines the various health insurance options open to you. Still, generally, you need to observe the following steps to pick the plan that suits you the best:
Choose The Type Of Plan You Want
For the majority of people, health insurance costs are the most crucial factor. The plans offered by HMO or the Health Maintenance Organization are usually the most affordable in terms of paying monthly premiums and the out-of-pocket medical service expenses. However, the plans offered by the HMO are also significantly restrictive. In such programs, a predetermined primary care physician will determine if there is any need for you to consult specialists in case of health issues.
The plans that PPOs or Preferred Provider Organizations offer also charge a higher premium but provide more flexibility in the choice of healthcare providers actually covered. Such programs do away with the referral system. They may even permit consultations with doctors who are not covered by the healthcare network. But it will cost you more, as mentioned before, and some plans or providers might even require you to file separate claims.
The last type of healthcare insurance plan to mention is POS or Point of Service plans that combine the best of both the worlds of PPO and HMO plans. These plans offer you the flexibility to choose the type of insurance service you want to opt for each time you consult a doctor. In other words, when you decide to consult a physician who falls in the primary care network, you save on deductibles, and it includes preventive care. If you choose to consult other physicians who do not fall under the network, the insurance costs are higher. People who seek to manage their health based on individual issues and willing to adhere to guidelines will find POS plans more attractive.
Consider Expenses To Determine Financially Suitable Plans
There are various types of payments associated with a health insurance plan that you need to consider and choose a plan that suits your financial condition the best. Such payments include:
- Co-payments that need to be made along with each visit to a medical service provider
- Co-insurance payments or the sum you must pay for the use of specific healthcare services
- Deductibles that need to be paid before the coverage starts
Lastly, you should note that several out-of-pocket expense limits vary significantly from policy to policy. Usually, more affordable plans also come with higher limits. It means that insurance plans with low premiums can make you end up footing a large part of your medical bill.
Consider How Accessible Your Preferred Doctors Are In The Plan
In an ideal situation, the doctors you want to consult, especially your regular physician, fall into the health insurance provider’s network. People who need to consult specialists regularly should try to ensure that such in-network doctors are close to their place of residence.
Be Aware Of The Possible Difference In Plan Structures
It is not uncommon to find health insurance plans that categorize service providers into the following tiers:
In such cases, healthcare service providers that fall under the primary tier are usually also the most effective.
Use The Tax Benefits Of Medical Expenses
Financial accounts dedicated to medical expenses are of three types:
- HRA or Health Reimbursement Account
- HAS or a Health Savings Account and
- FSA or a Flex Spending Account
Of these, the HRA account type is funded by employers. Some health insurance plans already consist of an HRA that accounts for the out-of-pocket costs without additional taxes.
You can choose to fund a HAS with up to $3600 for yourself and $7200 for your family if you have a health insurance plan with a high deductible. People older than fifty-five can choose to contribute an additional $1000 optionally. Another benefit of an HRA is the possibility of a one-time rollover to IRA up to the contribution limits mentioned earlier. Note that all such contributions serve to reduce your taxable income.
The last type of health savings account is the FSA. It gives you the freedom to review your annual health insurance benefits. For 2021 the upper limit of such pre-tax income you can spend to fund out of pocket expenses is $2750. Remember you need to exhaust this amount by March of the following year. Such an account is highly beneficial for people looking to save on taxes.
It is by no means easy to select a health insurance provider. But the guidelines and steps mentioned above should assist you in this daunting task. At times, it might be indeed helpful to seek professional help and let them guide you to plans that suit your needs the best. Anyway, here’s wishing you the best of health and healthcare.