With many different options available, choosing health coverage can be overwhelming. But understanding your healthcare needs and personal preferences can help narrow down the number of plans to consider. With the exception of special life events that trigger unique enrollment opportunities, insurance plans cannot be changed outside of the annual open enrollment period. Changes to current health status may not align with this timeframe, so you want to ensure you have a plan that covers you (and any dependents or a spouse) for any eventuality.
The following list of questions should help you identify and prioritize your personal preferences when looking at plans. Each question has an additional note to explain its relevance and how the answer might affect the plan you choose. As you go through the questions, think about the healthcare you’ve needed so far and what you might expect to want or need in the coming year. If you’d like additional assistance, don’t hesitate to reach out to your financial advisor to talk through the decision-making process with them!
Access to Care
1. Do you have any current doctors or physicians that you want to continue to see?
Insurance companies offer doctors a chance to join their “network” and there are many mutual benefits that come with this agreement. These networks are then offered to you as an enticement to choose their health plan. Most plans have better rates for using in-network doctors so it is important to know if your doctors will be considered in-network for the plan you choose.
2. Are there any pharmacies near your home or place of work that you prefer to use for prescription medications? Likewise, are there any hospitals in your area that you want to ensure are covered?
Similar to how doctors can join the insurance network, hospitals, clinics, and pharmacies can also join and be “in-network” with your insurance company.
3. Are you ok if the plan requires you to get a referral from your primary care doctor in order to see a specialist?
Some plans, notably HMO plans, require you to get a referral from your primary care doctor before you can go to a specialist. Specialists are doctors that have completed advanced education and training in a specific field, such as dermatologists, neurologists, cardiologists, etc. If you anticipate needing these services often, a plan that requires you to go through the ‘gatekeeper’ of a referring primary care doctor may not be the best for you.
It should also be noted that a referral by your primary care physician does not guarantee coverage under your plan, and you should always check with your insurance before you attend an appointment.
4. Do you travel within the United States frequently? If you do, would you need coverage that has access to a nationwide network of doctors? Or would a more restricted regional network be sufficient for your needs?
Insurance networks can be regional or nationwide. Regional networks are limited to a geographic area and therefore can be more affordable in price. Nationwide networks allow you the flexibility to see in-network doctors in any of the U.S. states and territories. Regional networks are often statewide but a few of them might be specific to several local counties.
In an emergency, ambulances and medical treatment at the ER will be covered even if you go outside the network. However, frequent travelers might wish to see an in-network doctor for a cold or to refill a prescription and that would only be accessible with a nationwide network.
1. Do you currently have a Health Savings Account (HSA), or would you like a plan that is compatible with them?
HSAs are a great way to set aside money on a pre-tax basis to pay for qualified medical expenses. HSA accounts are compatible with high-deductible health plans. Any unused funds can roll over year after year, and be invested to grow for use in the future.
2. Is the out-of-pocket maximum associated with the plan a potential cost you could afford or budget for?
The out-of-pocket maximum is the most you will pay out of your pocket for covered health services in a year. The deductible, any copayments, and coinsurance that you pay for medical care will all count towards the out-of-pocket maximum amount that year. Plans that offer out-of-network benefits will have a different out-of-pocket maximum amount for in-network and out-of-network services. This is very helpful for determining the ‘worst-case scenario’ for any given year. It will help you estimate the potential impact on your personal finances in a year with a high number of medical services, or a service with a high cost.
3. When considering your upfront costs for healthcare, would you prefer to pay a higher monthly premium but a lower cost for individual medical services received? Or, would you prefer to pay less each month in premiums, but have a higher cost responsibility when you receive medical care?
This question has a lot to do with your risk tolerance and financial situation. If you have the savings to cover the out-of-pocket maximum for your plan, choosing a lower monthly premium can potentially save you money in the months that you do not have many medical services. Alternatively, a plan with higher monthly premiums and lower costs at the time of service can be easy to manage and budget for.
4. Would you prefer to pay a flat rate copayment for each doctor visit, or would you be comfortable with a percentage-based cost?
If the plans you are comparing have similar out-of-pocket costs, this question is more about your personal preference for an organization. Plans with flat-rate co-payments often have higher monthly premiums or fixed costs. These types of ‘pay in advance’ plans can be very easy to manage because the flat rate copayment is the same every time you go to the doctor. These plans are great if you have lots of regular repeat services with an in-network doctor, such as mental health services.
Alternatively, if you do not mind navigating a percentage-based coinsurance on your doctors' bills, you may find plans with coinsurance have a lower monthly cost.
Insurance Carrier Option
1. Do you have any insurance companies you prefer to work with? Or any that you refuse to work with?
Each insurance carrier has its own perks and benefits. You might consider the size of their doctor network, the quality of their customer service, or even the design of their websites and support tools. You may want to weigh your personal preferences against each carrier. For example, if it’s important to have an app on your phone to check your claims and find your doctors, you might prioritize that over costs.
2. If you choose to change insurance carriers, do you feel it’s worth the effort required to make the switch?
Will you need to find new providers? Or be required to move your medications over to a new pharmacy? Does the new insurance carrier use the same bank or a different bank for an HSA plan, if you have one? If you need to wait for your new ID cards to arrive in the mail, will this timing be ok for your family? You may have to restart your deductible and out-of-pocket maximum if you are making the change mid-year; will this be something you can afford?
3. Do any of the insurance plans come with additional perks or benefits you would like to use?
Many insurance companies offer discounts for healthy lifestyles, such as Silver Sneakers, or discounts to Weight Watchers. If you utilize these benefits or would like to, consider the priority of those services against your preference for the company.
Types of Services Covered
If you are considering coverage through an employer, your spouse's company, or retiree benefits, different plans may cover different types of services. So you will want to consider what services are covered under the plan.
1. Do you want coverage for alternative therapies?
In addition to covering doctors, pharmacies, and hospitals, some plans offer coverage for alternative therapies such as naturopathy, acupuncture, chiropractic care, massage therapy, etc. If you feel you would want to utilize these services, you may want to choose a plan that covers them.
2. Would you prefer the convenience of Telemedicine?
Even before COVID-19, some people preferred to use telemedicine instead of going to their doctor’s office. This was especially true in regard to visits that didn’t require a physical exam, such as mental health visits or to discuss test results. If you feel you could benefit from this option, you may want to choose a plan that covers telemedicine.
3. Are there annual or lifetime maximums on any of the covered services you would like to use?
Insurance plans can often have benefit limitations in the form of a maximum number of visits annually or a maximum dollar amount. Here is a list of services that are commonly limited:
- Dental and Orthodontic
- Hearing Aids
- Physical Therapy
- Speech Therapy
- Occupational Therapy
- Fertility Treatments
- Durable Medical Equipment
You may want to confirm with your insurance if you currently use or are planning to use any of these.
4. Are you expecting any large medical events in the next year? Such as a planned surgery or pregnancy?
This is perhaps the most important question of all. If you know you are expecting large medical costs, preparing your plan selection around that event might be one of your top priorities. Consider the doctors you will need, the out-of-pocket maximum on your plan options, and the timing of your event within the year. Prioritize your preferences and choose a plan that is going to suit your needs for this year. You can always make a new selection during the next open enrollment period.
When choosing a health plan, it’s important to consider budget, personal preferences, and health needs before making a decision. Although this blog is not an exhaustive list of all the features and preferences you can go over to consider a plan, it does cover most of them and will help you to make the best decision possible for your needs. If you want to take it a step further, ask your financial advisor about completing a Health Planning Analysis! Simply reach out to get support for this complex decision by getting health plan options tailored to your needs.