The proverb – ‘Health is Wealth’ does hold true even in current times. Today’s fast-paced lifestyle makes you prone to health troubles. Diseases and unfortunate accidents not just hamper your health but also dig a deep hole in your pockets. For the sake of your family’s health and financial stability, it is essential to buy health insurance that fits your needs.
There are a plethora of options when it comes to choosing health insurance. To select the one that caters to your health requirements, you need to consider various factors such as coverage, deductible, premiums, out-of-pocket expenses, and more. Here are 5 simple steps to help you choose the right health insurance:
1. Choose a market place
Most employers provide a health insurance plan to their employees, and it often extends to their immediate family. In case your employer doesn’t offer health coverage, you can look for a health plan at federal, state-run, or private market places. Please note that the insurance plans provided by your employer would cost you way less than buying one from other market places as the employer pays partly towards the premium. Some insurers offer health coverage at a lower premium if you also buy life insurance from them.
2. Know the difference between various plans
Once you’ve zeroed in on the market place, you need to sift through different types of health plans to find the one that covers your needs. There are four major types of health insurance plans: HMOs, POS, PPOs, and EPOs.
- HMO: Health Maintenance Organization or HMO is a group of medical professionals and health service providers that offers a fixed package health insurance. It is one of the cheapest plans in terms of out-of-pocket expenses as it only covers treatment within its network. It also requires referrals from your primary care physician to consult a specialist or to undergo a procedure.
- POS: Just like HMO, Point of Service plan requires you to get a referral from your physician before you consult a specialist for treatment. But it has the added advantage of allowing you to avail out of network services. Please note that, if you opt for out of network treatment then it will be much more expensive than services within the network.
- PPO: Preferred Provider Organization aka PPO has a wider network as compared to HMO and POS. Also, you don’t require your physician’s referral to avail the treatment of your choice. Similar to POS, PPO provides cover to out of network services but they are expensive in comparison to finding providers within the network. The only drawback is that you might have to pay more out-of-pocket.
- EPO: Exclusive Provider Organization or EPO allows you to find a provider without a referral from the physician but it has a limited network of providers. Also, EPO doesn’t cover services from providers out of the network. It saves a lot of money by reducing out-of-pocket expenses.
3. Check the network of the health plan
Based on where you live, you need to decide if you need a wider network of providers. If you live in a city and your family doctor is on the list of providers, a plan with a limited network might work for you. But if you live in a rural area, it is important to expand the coverage network to find the providers as there might be very limited health services around the area.
4. Select the deductible based on your needs
Deductible and premium are inversely proportional to each other. The more the deductible, the lesser will be the premium, and vice-versa. If you are suffering from a long term ailment or you require medical assistance too often, then you should opt for a higher premium as it would lead to lesser deductible i.e. lesser expense out-of-pocket. But if you rarely fall sick, you can choose for a higher deductible and a lower premium.
5. Ask questions to narrow down your search
After doing some online research and narrowing down to a few options, it is time to dig deep and ask the right questions. Call the insurance company that provides the health plan and ask all your queries. Does the plan cover diabetes treatment? Once the claim is submitted, will the money be disbursed upfront or will it be reimbursed later? Does the plan cover the purchase of prescription drugs? Once all your questions have been answered satisfactorily, you can then make an informed decision.