Choosing a Health Care Plan: Coverage, Cost, Compare
There are three major factors to consider when choosing a health plan: Coverage, Cost and Compare. Each has its own unique set of questions. By considering each of these factors, you can choose the plan that works for you and your family.
Coverage means the range of health services covered by your plan, such as doctor visits, hospital visits, maternity care, emergency room care and prescription drugs. You’ll want to see what is offered, whether there are limits on types of services and how often you can use them in a year.
- Find out which services are covered beyond basic care and which services are not covered. If you need a specific type of care like orthopedic services, make sure the plan offers that type of coverage.
- Find out if the plan limits which doctors, hospitals and other providers you can use. If you have a favorite doctor, is he or she part of the network? What will happen if you want to see a provider who is out-of-network? Will you have to pay more? Are the in-network doctors and hospitals conveniently located for you?
- If you spend a lot of time out of state, check to see if you can get health care services in other states and what the provider network looks like outside your home state.
- Check out the prescription drug coverage. Make sure the pills you take regularly are covered. See if there are discounts on generic drugs or if you can receive your prescriptions by mail.
It is important to understand the costs of your coverage.
- Premiums are the regular monthly payments you pay to your plan.
- The deductible is the amount you have to pay for health services each year before the plan will cover costs. Let's say you have a $200 deductible. You go to the doctor and the total cost is $250. You pay the first $200 to meet the deductible, and the insurance company pays $50. You have satisfied the deductible for the rest of the calendar year. There are some services you can get without having to pay a deductible, such as preventive care.
Coinsurance or copayment is a portion of the cost you may have to pay when you go to the doctor, get a prescription or use other covered care.
- Coinsurance is a percentage amount, such as 20 percent of the allowed cost of a doctor visit. For example, if the plan’s allowed amount for an office visit is $100 and you’ve met your deductible, your coinsurance would be $20.
- A copayment (or “copay”) is a set dollar amount. For example, you might pay $15 for each prescription or doctor's visit.
- Out-of-network providers are doctors or other health professionals who are not part of your plan. Check to see if you have to pay more for an out-of-network provider.
Once you understand health plan coverage and costs, you can begin to make comparisons and choose the plan that gives you the best value for the coverage you need. The health care law makes it easier to understand health plan coverage and costs and to compare plans. All plans must now use a standard Summary of Benefits and Coverage (SBC) form. It’s similar to the Nutrition Facts label you see on packaged foods.
You can compare plans “apples to apples” because the information for each plan will be laid out in the same way, using language that you can understand. You’ll see it when you shop for coverage on your own or get coverage at your job (but not when you select a Medicare plan). If you do have health coverage and haven’t seen the SBC, ask your human resources department for a copy.
If you need insurance, there is a new way to shop for it. Beginning October 1, 2013, every state will have a Health Insurance Marketplace, which makes it easier for people to buy health coverage. The Health Insurance Marketplace is a new way to both compare and buy plans and to get your health coverage questions answered. Through the marketplace, you can:
- Shop online and get help by phone or in person to find the plan that works for you and your family.
- Compare health plans based on benefits, cost and other features you find important.
- Find out what kind of financial help you may be able to get to buy health coverage.
- Find out how the health care law works for you and your family. Get started with AARP’s Health Law Answers: www.HealthLawAnswers.org.
- Learn more at AARP and the Health Care Law: www.HealthLawFacts.org.
- Use this Calculator, by the Kaiser Family Foundation, to get an estimate of the financial help you may qualify for and an estimate of your monthly payment (premium) for coverage you buy through the Health Insurance Marketplace.