The Actually Helpful Guide to Picking a Health Insurance Plan

The Actually Helpful Guide to Picking a Health Insurance Plan

Health care can be very expensive. Having a baby costs about $30,000, and so does the average three-day hospital stay. Health insurance is a way to reduce those costs to an amount that you can manage by sharing the risk with others. That works because most people are mostly healthy most of the time, so their premiums help pay for the expenses of the small number who are sick or injured. The Actually Helpful Guide to Picking a Health Insurance Plan.

 

Here are the three major questions you need to ask when picking a plan.
What does the plan cover?
Insurance sold to people and small businesses must cover 10 “essential health benefits.” Any plan you buy, whether through your state’s Health Insurance Marketplace or not, will pay for these services.

Emergency services
Hospitalization
Laboratory tests
Maternity and newborn care
Mental health and substance-abuse treatment
Outpatient care (doctors and other services you receive outside of a hospital)
Pediatric services, including dental and vision care.

Prescription drugs
Preventive services (such as immunizations and mammograms) and management of chronic diseases such as diabetes
Rehabilitation services

The rules for insurance provided by large employers are a little different but the vast majority them will cover the same set of benefits. To make sure, ask your employer for the Summary of Benefits and Coverage, a standard form that will state exactly what the plan covers and doesn’t cover.

It’s important to know, though that some older plans may not cover this whole list of services. These are plans sold to individuals or small business (with up to 100 employees) that started before the new health reform law took full effect in 2014.

Under certain circumstances these plans can be renewed even though they don’t have all the consumer protections available with newer plans. If you have such a plan your insurance company will send you a notice about it before the annual renewal date. Then you can consider whether to keep it or to switch to a new plan. Re
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How much does the plan cost?
 
You pay for health insurance in two ways:
 
The monthly premium that you pay to purchase your plan.

The out-of-pocket expenses you pay when you receive medical care. Those are some combination of deductibles, coinsurance, and copays.

 

In general, if you pay a higher premium upfront, you will pay less when you receive medical care, and vice versa.
 
If you purchase coverage through your state’s Health Insurance Marketplace, you may be eligible for income-based subsidies that lower the cost of your premium and in some cases your out-of-pocket expenses.
 
Which doctors and hospitals are in it?
 
Every health insurance plan has a network of providers—doctors, hospitals, laboratories, imaging centers, and pharmacies that have signed contracts with the insurance company agreeing to provide their services to plan members at a specific price.

 

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