May 28, 2017
Man by laptop, mother with baby girl (6-9 months) in background

How to Pick the Best Health Plan

by Nancy Metcalf  |  

Whether you are choosing among your employer’s health plans or buying individual insurance through the health insurance marketplace, deciding which plan is best for you can seem daunting. But it needn’t be: You just need to know what to look for and which personal factors to consider in order to compare plans.

Here are five essential do’s and don’ts that will guide you to the right insurance plan for you and your family. And remember, open enrollment happens every fall, so if you’re not happy with the plan you choose, you can enroll in a different one next year.

1. Don’t shop by premium alone. A plan with a lower-than-average premium will usually have higher out-of-pocket costs such as deductibles and copays. A low-premium plan with a $4,000 deductible may put health care out of reach if you don’t have that much cash to spare. So before you choose, look closely at what you’ll have to pay for specific services over and above the premium. Online health exchanges make this easy to do; with employer plans, you may have to ask your benefits department for the information.

2. Do consider your medical and financial situation. Someone with a chronic disease requiring long-term medication or medical monitoring has very different needs than a healthy 28-year-old. Also consider whether your budget could handle out-of-pocket costs associated with an unexpected, costly illness or accident. If you’re buying individual insurance on the exchange, HealthCare.gov, which handles enrollment for 37 states, announced that it will debut an online out-of-pocket cost comparison tool for the 2015 Open Enrollment Period (for plans beginning in 2016). The tool will give you a rough estimate of your total costs—premium plus out-of-pocket —for high, medium, and low health care usage. Open enrollment for exchange plans begins Nov. 1, 2015. (Open enrollment for employer plans varies by employer but often starts in October. Check with your company’s human resources manager.)

3. Don’t worry that whole categories of care won’t be covered. Thanks to the Affordable Care Act, gone are the days when a health plan could, say, simply not cover mental health or maternity services. All plans sold directly on exchanges must cover all “essential health benefits,” including hospitals, prescription drugs, outpatient procedures and office visits, and rehabilitation, mental health, maternity, emergency, and preventive services (think immunizations and screening mammograms and colonoscopies). Employer plans have slightly more leeway on what specific services they include but will also cover the same broad categories of benefits.

4. Do make sure your doctors are in the plan’s network. This can be a challenge because network directories aren’t always up to date—if you can even find them. That’s why, for the 2015 Open Enrollment Period, HealthCare.gov is requiring all participating health plans to provide a clickable link that takes shoppers directly to the plan’s specific directory. Asking doctors what plans they participate in isn’t as helpful as you might imagine. If, for instance, they say they “accept” a Blue Cross plan, it may or may not be the specific Blue Cross plan you are considering. For best results, don’t ask a doctor or nurse; ask whoever in the practice handles insurance claims and billing.

5. Don’t forget drug formularies. These are the lists of drugs that health plans cover, typically in “tiers”—the higher the tier, the more you’ll have to pay out of pocket. If you routinely take prescription drugs, spend as much time as you need to determine whether they’re on the plan’s formulary, and at what tier of coverage. HealthCare.gov is now requiring a direct link to each specific plan’s formulary; if you’re ensured through your employer, you may have to ask the benefits department for a link.

See also: New to Medicare? 6 Things to Know and 5 Tips for Buying an Obamacare Insurance Plan.