Choosing a Health Insurance Plan

It can be confusing trying to decide on a health insurance plan. There are a multitude of options out there are, all with their own advantages and disadvantages. The costs for health insurance plans can vary dramatically. Also, the type of coverage and other features are different for each plan, making it challenging to match a health insurance plan to your specific situation. However, with the right information, you can pinpoint the health insurance plan that is right for you.

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Where to Look for Health Insurance

Some people are fortunate enough to have an employer that provides health insurance for its workers. This helps to narrow down your choices to plans offered by your employer. However, if your employer does not offer health insurance coverage, or if you are unemployed, you will have to find other avenues to look for a health insurance plan. Many people belong to organizations or professional associations, which enable you to purchase medical insurance through the organization under a group rate.

Alternatively, the Affordable Care Act (ACA) marketplace is another option you should look at. You may even be able to qualify for reduced premium charges through the ACA marketplace. However, because these laws are currently being debated in the political realm, it is possible policies regarding reduced premiums or upfront premium credits will end up changing. Therefore, it is a good idea to obtain the most up-to-date information on the latest changes to how the government implements the ACA.

On the other hand, if neither of these sources for health insurance will work for you, for whatever reason, you will have to resort to purchasing a health insurance plan on the private market. Looking for insurance on the private market will give you the most options, however, they will probably be much more expensive than an employer-based plan or a plan through the ACA marketplace.

Different Types of Health Insurance Policies

There are a variety of different types of medical insurance plans available. It is important you educate yourself on the different types of plans before deciding on a plan which best fulfills your requirements. The four basic types of health insurance plans available are: Health Maintenance Organizations (HMOs), Preferred Provider Organizations (PPOs), Exclusive Provider Organizations (EPOs) and Point of Service (POS) plans.

HMOs are one of the most common types of medical insurance plans available. This type of plan requires you to visit medical care providers specifically within the health policy's network. Additionally, under an HMO, your primary care physician must provide a referral before you are able to obtain treatment from a specialist.

On the other hand, PPOs do not limit you to healthcare providers within the policy's specific network. However, PPOs will incentivize you to stay within the policy's network by making it more expensive to visit a medical care provider outside of the policy network. One advantage that PPOs have over HMOs is that with a PPO policy, you do not have to obtain a primary care physician's referral in order to visit a specialist.

EPOs are pretty much a mix between PPOs and HMOs. With an EPO, you are required to stay within the policy's network but referrals from primary care physicians are not required for seeing a specialist. In contrast, POS policies are basically the reverse of EPOs, meaning you are not limited to a specific network of healthcare providers; however, you are required to obtain a primary care physician's referral before visiting a specialist.

These different types of medical plans also vary in costs. Usually HMOs and EPOs are less expensive than POSs and PPOs, with comparable coverage levels. On the other hand, if your area is lacking in policy coverage or maybe you do not want to limit yourself to a specific network of providers, you may want to pay the extra premium for a POS or PPO plan.

High vs. Low Deductible Policies

A deductible is the amount of money that you are required to pay before the insurer will start paying for a claim. Usually the higher a health insurance policy's deductible, the less you have to pay in monthly premiums. On the other hand, this would mean you may have to pay significantly more in medical costs out of your own pocket before the policy starts to help pay for healthcare expenses which arise in a given year.

A high deductible plan may be a good idea if you expect to have few or even no medical expenses for the year. Having a low amount of healthcare expenses for the year means you would likely not surpass the deductible, even if you had a policy with a low deductible. Therefore, choosing a policy with a high deductible but a low monthly premium would make the most financial sense.

Take Stock of Your Personal Situation

Now that you have a better understanding of the various options available for health insurance coverage, you will need to make sure you understand your own specific needs in order to make a good decision. You will have to determine your estimated annual medical costs. Also, your income level and various other factors will play a role in choosing a plan that is right for you.