Health insurance is one of the best ways to be prepared for unexpected health emergencies and expenses. Although the jargon and technicalities may seem confusing at times, it is important to prepare yourself mentally and read through all terms before making a big decision, such as finalizing your insurance provider and agreeing to their conditions. To make this process easier for you, here are six things you must know before buying health insurance:
Waiting period
The waiting period is the time where one cannot raise a claim against the health insurance plan. Generally, insurance providers have a 30-day waiting period, during which they may not accept claims. This period may be even longer for pre-existing conditions, maternity benefits, and certain other ailments, and will differ from company to company.
Coinsurance and copay
Coinsurance is the percentage of the claim that is borne by the policyholder. Copay is a flat fee paid every time you receive a health care service. When shopping for health insurance, it is important to find the right percentage of premium and coverage, as a lower monthly premium could mean higher out-of-pocket costs, and vice versa. Checking these details and choosing a policy carefully could significantly lower your healthcare costs over time.
Summary of benefits
Visit your insurance provider’s website for details about their various plans and the services they cover. Compare these benefits with other plans to find the right one for you and your family. You may find key differences in plans in areas like physical therapy, fertility treatments, and mental healthcare, so be sure to factor this in when making a decision.
Your family’s healthcare needs
Consider the amount and type of treatment you and your family members have received over the past. Some of these conditions may require regular intervention, making them a recurring expense. Weigh these needs against the list of benefits offered by your insurance provider. This may help you make a more informed decision, and reduce your bills in the future.
Health Plan Networks
When looking for a new health insurance plan, it is key to look for one with a larger network. This is because there is a significant difference in costs when one goes to an within-network provider, as opposed to one outside the network, as the insurance agency has already negotiated lower prices. If you already have a doctor you would like to continue seeing, ask them if they accept your new insurance plan.
Opting for a plan with a larger directory will give you more flexibility and more options to choose from, and switch between doctors if needed. Avoid opting for healthcare plans that do not have any local in-network doctors.
Comparing available insurance plans
Generally, there are four managed healthcare plan types to choose from - Health Maintenance Organization (HMO), Preferred Provider Organization (PPO), Exclusive Provider Organization (EPO), and Point of Service Plan (POS). The main differences between these plans lie in their network coverage, requirement of referrals, and the cost.
HMO
You have the least amount of flexibility here, and must choose between in-network providers, except for emergencies. It generally requires referrals and has low out-of-pocket costs.
PPO
While there is more flexibility with these plans, staying within the network leads to lower treatment costs. Out-of-pocket expenses for such plans are generally high.
EPO
With an EPO plan, you can directly choose between the in-network providers, without having to work with a primary care physician. Out-of-pocket expenses for these services are lower than PPO.
POS
With a POS plan, you are required to visit a primary care physician and get a referral from them, before you can visit a specialist. Although referrals are mandatory, this allows you to have access to more provider options, and a primary care physician to navigate all your healthcare needs.
How to choose your health insurance policy?
When buying health insurance, the federal health insurance ‘Medicare’ is perhaps the most popular option. It has two coverage options: Traditional Medicare (Part A and Part B, and Medicare Advantage Plan (Part C). Those looking for additional coverage may also opt in for Medigap.
Part A of this insurance plan covers inpatient care in a hospital, skilled nursing facility care, nursing home care, hospice care, and home health care. Part B covers necessary, as well as preventive services like clinical research, ambulance services, durable equipment, in-patient care, outpatient care and partial hospitalization for mental health services, and limited outpatient prescriptions. These plans require the payment of a deductible and coinsurance, which is usually 20% of the cost of the approved service.
Part C or Medicare Advantage is rolled out by a private company and may offer extra benefits like vision, hearing, and dental services. It also sets a limit on what you will have to pay out of pocket each year for covered services, making it a more attractive option for many.
Anyone can join these plans during these enrollment periods.
Initial Enrollment Period
You can join a plan when you first become eligible for it.
Open Enrollment Period
You can join, switch, or drop a plan between October 15 - December 7 each year. Coverage for the new plan begins on January 1.
Medicare Advantage Open Enrollment Period
Those enrolled in a Medicare Advantage Plan may choose to switch to another, or go back to the Original Medicare Plan between January 1 - March 31 every year.
