How Can I Know I'm Purchasing the Right Health Insurance Policy?

The Affordable Care Act means health insurance plans for individuals and families have more in common, like metal tiers and essential health benefits. But you still have some decisions to make when finding the right plan for you and your family.

A good way to start is to think about how much you use your insurance. If you go to the doctor a lot, you may want a plan with higher monthly payments but lower out-of-pocket costs. It makes your medical expenses more predictable.

If you're healthy and rarely go to the doctor, you might want a plan with lower monthly payments. But lower-priced plans have higher out-of-pocket costs. That means you'll pay more up front when you need medical care. 

How it works: meet Mike and Lisa

Mike and Lisa are both self-employed, so they buy their own health insurance. Mike's married with three teenagers all involved in sports. Between minor injuries, typical illness and managing Mike's mild high blood pressure, the family goes to the doctor and fills prescriptions frequently. Lisa is 33, single and has no children. She's rarely ill and exercises regularly. Last year her only medical expenses were a doctor bill and prescription when she got bronchitis. Let’s look at some health plan options for them.

With an active family, Mike has a lot of expenses. So he's concerned about the monthly cost of his health plan. If he chose Blue Cross Preferred HMO Bronze Saver HSA, his monthly payment would be quite a bit lower than Blue Cross Preferred HMO Gold. But that’s not the whole story. Mike should also think about his out-of-pocket costs: what he has to pay when he uses his coverage. Here’s how the two plans compare.

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How the two plans compare

Blue Cross Preferred HMO Bronze Saver HSA

Blue Cross Preferred HMO Gold

Individual deductible: $8,000
Family deductible: $16,000

Individual deductible: $1,700
Family deductible: $3,400

Coinsurance: 0%

Coinsurance: 20% after deductible

Office visits: $0 after deductible

Office visits: $30 for primary care

If he chooses Preferred HMO Bronze Saver HSA, Mike will pay all his medical and pharmacy bills until they total the plan’s individual $8,000 or family $16,000 deductible, depending on who is being treated. Since illness and injuries don't happen regularly, other than his monthly payment Mike won’t know what his medical expenses might be each month. One month everyone could be healthy; the next month they could rack up $2,000 in medical expenses.

With Preferred HMO Gold, his deductible is only $1,700 for an individual or $3,400 for his family. Then his plan starts sharing up to 80% of the cost. He also doesn’t have to pay his deductible first to get low doctor visit and pharmacy copays.

Although his monthly payment will cost more, Mike is probably better off with Preferred HMO Gold. Here’s why.

  • He'll quickly meet his deductible so his plan will start sharing costs much sooner.
  • His coinsurance will be lower.
  • His costs will be more predictable.

And if Mike is eligible for a subsidy, he’ll get help paying for his plan.

Lisa could also get lower monthly payments by choosing a bronze plan with a high deductible. In fact, she seems like a great candidate. Why pay for something she doesn't use? But what Lisa doesn't know is that in a few months she won't feel so good. After doctor visits and tests, she'll be diagnosed with diabetes. Now she has a health condition to manage — and a lot of bills to pay on top of her premium because she has to meet her high deductible before her insurance starts sharing costs.

What's right for you?

Everyone's life is different. But no one is immune to illness and injury. That's why there's health insurance. A good approach is to get a plan that balances the lowest out-of-pocket expenses with a monthly payment you can afford. That could be the right plan for you.

A subsidy can help make your health insurance more affordable. When you're shopping for plans, you'll be able to see if you qualify for lower costs.

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