CHOOSING THE RIGHT PLAN FOR YOU

While Healthcare Whiz cannot help each individual select a health insurance plan suited for his or her particular needs, we can offer some general advice that will help in the selection of an appropriate plan. This information will aid those in search of coverage in the health insurance marketplace/exchange as well as those analyzing how their current plan fits their particular needs. The goal is to minimize the total cost of the plan taking into consideration premium payments as well as out-of-pocket costs for medical care. Please note that this discussion is meant for consumers looking to purchase private health insurance. If you qualify for government health insurance, Healthcare Whiz recommends that you take advantage of that and enroll.

If you've reviewed the information presented in this section on health insurance carriers, plan types, and benefit components, you have a great core base of knowledge that can be used in selecting the right plan for you. Now, the trick is to balance the cost of the premium you pay for your plan each month with the amount of out-of-pocket costs you have to pay when receiving medical care, namely copays, coinsurance, and deductibles. A significant consideration in determining the right plan for you is how often you seek medical care. To explore this point, let's consider a couple fictional examples:

• Jane is a 26 year old female who is no longer allowed on her parent's health plan and does not receive insurance through work, so she is looking into individual coverage for herself. Jane is healthy and on no prescription medications. She estimates that she visits her primary care doctor two or three times a year. She does not currently have a family of her own but hopes to someday. While researching health insurance plans, she finds options that range in monthly premium payments from around $100 to over $500.
• John is a single 58 year old male who recently became self-employed and is researching his health insurance options. John has multiple health problems including diabetes and high blood pressure and has been prescribed multiple ongoing medications. He visits his primary care physician often. In addition, he sees his cardiologist regularly and is commonly referred to other specialists.

These are simplified examples as neither individual has a family to cover and they seem to be on opposite sides of the health spectrum. We're also going to assume that neither are eligible for Medicare or Medicaid. Still, we can use these examples to demonstrate some things every consumer should consider when analyzing health insurance plans.

In Jane's case, she is a low utilizer of medical care and does not have chronic health problems. The low premium plans she finds are most likely high deductible health plans with a savings account option, while the high premium plans are probably more robust benefit plans with lower copays, coinsurance, and deductibles. Jane would probably be smart to go with a lower premium plan because it doesn't make sense for her to spend a lot of money each month on benefits she doesn't utilize. Since she only visits the doctor a few times a year, she will save money by paying a bit more out-of-pocket when she does need to go to the doctor but paying a lot less in premiums each month. Now, Jane needs to realize that if a catastrophe were to happen, such as a broken bone or serious illness, she would most likely owe more out-of-pocket with the high-deductible plan. However, seeing as the chances of such an event are relatively low and she has the option of saving a portion of her income tax-free to help cover those unforeseen costs, it is probably worth the risk.

The opposite is true for John. Since he is a high utilizer of medical care and does have chronic health problems, it would probably be smart for him to consider paying a higher premium each month to avoid excessive out-of-pocket costs due to frequent utilization of care. He'll want to make sure that his doctors participate in the network of the plan he chooses and that his prescription medications are covered.

Of course, these examples are generalizations, and most individuals will probably find themselves somewhere in between Jane and John on the health spectrum. Nevertheless, the decision-making process remains similar. It comes down to balancing your premium expenditure with your out-of-pocket cost risk depending on how often you utilize medical care. The goal is to not throw money away on either side.

In addition to cost, here are a few other important considerations when choosing a health insurance plan:

• Does the plan have a large provider network, and is my doctor part of it? If not, your choices may be limited and you may not be able to continue seeing your preferred doctor. Most large insurers allow you to search for participating providers on their website, and your doctor's office should also be able to tell you their network status with most carriers.
• How does the insurer compare to others on customer satisfaction and quality? The National Committee for Quality Assurance (NCQA) offers an excellent tool to compare accredited health plans in your area called the Health Plan Report Card. Simply enter your state and the type of plan you're looking for and search the accredited plans. You can then choose which insurers to include on your report card.
• Prescription drug benefits. If you're on prescription medication, it's a good idea to find out if your medication is covered and how much it will cost.

Essential QSA Knowledge

Consider your personal health situation. How often do you utilize medical care? If the answer is often, you may be better off choosing a higher premium, robust benefit plan to avoid high copay, coinsurance and deductible costs when utilizing care. If the answer is rarely, you may be better off choosing a lower premium, less robust benefit plan to avoid wasted premium payments but still have protection against unforeseen medical expenses. Many people will probably find themselves in between these two answers, and that is where each consumer must decide how much to minimize their premium expenditure without taking on excessive risk of out-of-pocket medical costs. The goal is to not throw money away on either side. A health insurance broker can help walk you through this decision-making process, and hopefully as the healthcare marketplace/exchange continues to develop, this process will become easier and easier.

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