How to Choose a Health Insurance Provider
When choosing a health provider, there are some factors you will want to consider. Most health plans are provided by a Managed CareA health care delivery system that combines health insurance, delivery of care, and administration. Managed Care Organizations (MCOs) are paid a set payment per member per month for these services. Organization (MCO), such as Presbyterian or United Health. The exceptions are MedicaidA joint federal and state program that helps with medical costs for some people with limited income and resources. Fee-for-Service, Original MedicareA fee-for-service health plan that includes hospital insurance (Part A) and medical insurance (Part B)., and Veterans’ Benefits.
Each MCO may offer several different health plans. It’s a good idea to compare health plans from multiple health insuranceA type of insurance that pays for some or all of your medical expenses.
providers to find one that meets your needs.
How to Compare Coverage and Benefits
When comparing health plans, review each plan for the Summary of Benefits, the Type of Health Plan and Provider Directory, and the FormularyA list of prescription drugs that an insurance plan will cover. Also called a “drug list.”.
Summary of Benefits
This will tell you what healthcare services the plan will pay for. All health plans will pay for basic healthcare services, such as check-ups, doctor’s visits, hospitals, behavioral health, and prescriptions. Some plans may cover additional care, such as dental care or eyeglasses.
Questions to consider:
- What services do you or other family members need?
- Who may also be on the health plan?
- What services do you think you may need in the near future?
- Can you afford to pay the costs of services that are not paid for by the health plan if you need them?
Type of Health Plan and Provider Directory
The provider directory lists what healthcare providers and facilities are in the health plan’s provider “network,” which means the providers that the plan will pay for.
The type of health plan will indicate how flexible you can be in choosing your healthcare providers and facilities. You may or may not be able to choose your health plan type, but there are two common types of health plans:
- Health Maintenance Organization (HMO)A type of health insurance plan that will only cover care from a set network of providers.: This type of plan requires you to use only healthcare providers and facilities that are within the plan’s network. If you choose to go to a provider who is not in the network, HMOs will pay little or none of the cost. Generally, your care will be coordinated by a primary care providerA health professional who practices general medicine and helps to coordinate all the different kinds of care you may need. (PCP) and you will need a referralA referral is an order from your doctor for you to see another kind of doctor or get a medical service. You often need a referral for your health plan to cover the care. from your PCP for any specialty care or tests. HMOs are usually less expensive than other types of plans, but they provide less freedom to choose where to go for care.
- Preferred Provider Organization (PPO): This type of plan also has a preferred network of healthcare providers and facilities. However, a PPO will cover care that you receive outside the network, though it will pay less of the cost than if you had stayed inside the network. With a PPO, you do not need a referral for specialty care or tests. PPOs provide more freedom to choose where to go, but they are usually more expensive than HMOs.
Two other less common types of health plans are:
- Exclusive Provider Organization (EPO), which is like an HMO, but you do not need a referral from a PCP to see a provider in the network.
- Point of Service Plan (POS) which is like a PPO, but you need a referral from your PCP for specialty care.
Questions to consider:
- What providers and/or facilities do you prefer to use?
- What providers or facilities are close to your home?
- How likely is it that you may need to use a provider or facility that is not in this health plan’s network?
Look for a health plan that pays for the providers and facilities that you prefer and are most likely to use. If you can choose your health plan type, consider whether you will need flexibility to go outside the health plan’s network, like if you live in a rural area and few providers are available.
Formulary
This is a list of prescription medications that your health plan will pay for. Look for a health plan that covers the medications that you need.
Questions to consider:
- What prescription medications do you use?
- What medications might you use in the future?
How to Compare Costs
It’s important when choosing a health plan to understand the costs of each health plan and the terms used.
- PremiumThe amount you pay for your health insurance every month. In addition to your premium, you may have to pay other costs for your health care, including a deductible, copayments, and coinsurance. is the fixed amount that you pay for your health insuranceA type of insurance that pays for some or all of your medical expenses.
every month, regardless of whether you get any health care. If you have an employer-sponsored health plan, this amount is usually deducted from your paycheck. - DeductibleThe amount you must pay for health care or prescriptions before your health insurance begins to cover the costs. When you have paid this amount in a particular year, this is called “meeting your deductible.” is the amount that you must pay for healthcare services you receive before your health insurance will start to pay. After that, your health insurance will cover all of the costs of your care, except for copayments and coinsuranceThe percentage of the total cost of a healthcare service that you must pay after you have met your deductible. (see below). For example, if your plan has a $1000 deductible, that means you must pay the first $1000 of your healthcare costs, which means “meeting your deductible” for the year. Some healthcare services, such as checkups, will be covered by your health plan even before you meet your deductible.
- CopaymentAn amount you may be required to pay for a medical service or supply, like a doctor’s visit or prescription drug. A copayment is usually a set amount, like $10 or $20. Also called a copay. (copay) is a flat amount that you pay for a particular health service. Usually you will pay the copayment at the pharmacy or doctor’s office when you go. For example, you might be asked to pay $20 for a doctor’s visit or a prescription.
- Coinsurance is a percentage of the total cost of a healthcare service that you must pay after you have met your deductible. Usually you will receive a bill for this amount from your healthcare provider in the weeks after you receive the care. For example, if your coinsurance is 20 percent, that means you pay 20 percent of your healthcare costs and your health plan pays for the rest.
- Out-of-pocketCosts for health care or prescription drugs that you must pay on your own because they are not covered by your health insurance plan. maximum is the maximum amount that you have to pay for your healthcare costs in a particular year, including coinsurance and copayments, but not including premiums. If you reach the maximum before the end of the year, your health plan will cover all the costs of your care for the rest of the year.
Most health plans will either have low premiums with high out-of-pocket costs (deductibles and coinsurance), or high premiums with low out-of-pocket costs.
- With low premium/high out-of-pocket costs, you will not have to pay very much per month, but if and when you get a medical service, it will likely cost more, and you will have to pay a lot before your health insurance starts to pay. This type is better for people who don’t anticipate needing much healthcare besides check-ups and one or two prescription medications.
- With high premium/low out-of-pocket costs, you will have to pay much more per month, but when you get a medical service, your insurance will pay more of the cost. This type is better for people who anticipate needing more health care, more prescription medications, or more expensive care, for example surgery or hospital stays.
- Many health plans fall somewhere in the middle, medium premium and medium out-of-pocket costs. These types are better for people who anticipate needing some health care besides basic check-ups and some prescription medications.
Questions to Consider:
- How much health care do you anticipate needing this year? Some examples would be the number of appointments, prescription medications, and surgeries.
- How expensive are the copayments and coinsurance?