President Joe Biden recently signed an Executive Order that created a special enrollment period for health insurance coverage. In addition, the American Rescue Plan Act (ARPA) provided additional subsidies for health insurance plans. Now many more Americans can find health insurance coverage with $0 or low dollar premiums. If you suddenly find yourself shopping for health insurance, here are a few things you should know before you choose an insurance plan.
Costs
There are a number of factors that come into play when looking at health insurance overall costs. Monthly premiums, copays or coinsurance, deductibles, and out-of-pocket maximums are all price points that you should weigh to determine which plan is right for you and your family. A monthly premium is like a subscription fee that you pay each month.
This cost does not go away if you do not use any health-related services for the month. As a general rule, the lower your premium, the higher your out-of-pocket costs. A copay is a set dollar amount that you pay to the provider at the time of service. Typically, this means a lower cost for a primary provider and a higher cost for a specialist. Coinsurance is a percentage of the overall medical costs that you pay. Coinsurance varies based on the provider and the services required. The out-of-pocket maximum is the highest dollar amount that you will pay in a calendar year. Beyond that dollar amount, your insurance provider must provide full coverage.
Determining Cost
Determining which plan is best for you and your family comes down to some basic information. If you find that you or anyone covered under your plan regularly requires medical care, medication, has a planned surgery, or is pregnant, then a plan with a higher premium but lower copays and deductible may be the better choice. If, on the other hand, you rarely need to see a doctor or specialist, then a plan with a lower monthly premium but higher out-of-pocket costs may be a better fit. Remember that there are subsidies available through the marketplace that may allow you to choose a better plan for you and your family at a cost that is much more affordable than it would otherwise be.
Network Types
Another important factor is the network type that your plan falls into. There are several different types, each with their own benefits and drawbacks. For instance, if you need to see a specialist and would prefer to choose your own doctor, then PPO or EPO would be a better fit for you. However, if you do not mind letting your primary care doctor choose your specialist for you, then and HMO or POS would work for you.
With an HMO or POS, you will likely need a referral before seeing a specialist. This could mean an additional copay or coinsurance before you receive a referral. In any case, if you have already established a relationship with a doctor that you like, make sure that your doctor is on the list of in-network providers for any health insurance plan that you choose. Most insurance plans charge more for out-of-network providers, so choose accordingly.