By RONI CARYN RABIN
October 18, 2016
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Buying health insurance for the first time can be a daunting task. The good news is that there is more financial assistance for health care coverage than ever before, and you can’t be denied coverage. The answers to some frequently asked questions can help you understand the real costs of a health care plan and choose a policy that suits your needs.
Should I pick a low monthly premium or a lower annual deductible?
If you’re like most young people and you’re fairly healthy, you probably want to shell out as little as possible in monthly premiums but still secure comprehensive coverage in case of an accident, sudden illness or a change in circumstances, like becoming pregnant. Just be aware that the less you pay for your monthly premium, the higher your annual deductible. That means you have to pay more out of pocket toward your health care before the plan kicks in. A cheaper plan may also limit you to a small selection or network of doctors.
“A young person might be inclined to do that, thinking, ‘Let me just get a high-deductible plan; I hardly ever go to the doctor. I just want this in case of an emergency and to make my mother happy,’” said Karen Pollitz, a senior fellow at the nonprofit Kaiser Family Foundation, adding, “That’s fine — I think young people can do that.”
What if I have a chronic condition and use my health plan a lot?
People with chronic conditions often opt for more expensive plans because they know they use more services, want a lower deductible and access to broader networks with more doctors and subspecialists, and possibly smaller fees for each service. These patients pay more in monthly premiums, but generally will have lower out-of-pocket charges.
What if I have a prescription for a drug I take all the time?
If you take medication on a regular basis for a condition like asthma or allergies, you will want to check that your drugs are covered under the health plan’s formulary, or you may face very steep costs.
(Related: The 8 health habits experts say you need in your 20s)
How do I know whether to pick an H.M.O., an E.P.O., a P.P.O. or a P.O.S.?
Most health plans these days are designed as managed care plans, which means the insurer has negotiated discounted fees with a network of doctors, hospitals, labs and other providers. That means patients have to seek care from the network and may not always be free to choose just any doctor they want.
Health maintenance organizations, or H.M.O.s, are the most restrictive plans. That means your care is covered only if you get care from a provider selected by the H.M.O. “You will only be covered when you seek care from a doctor, hospital, lab or other provider that is in the network,” said Ms. Pollitz. E.P.O.s, or exclusive provider organizations, follow similar rules.
Preferred provider organizations, or P.P.O.s, also have their own networks of doctors for you to choose from, but they also will cover you at a lower rate if you want to use an out-of-network doctor or hospital. Out-of-network doctors and hospitals can bill whatever they want, Ms. Pollitz warned, “and the plan will only pay a percentage of what it thinks is reasonable. You owe the balance.”
Point of service plans, or P.O.S.s, are hybrids that combine elements of both H.M.O.s and P.P.O.s. These plans may require you to name a primary care provider to coordinate your care.
The one exception to the restrictions imposed by a managed care plan is a medical emergency, in which case a patient typically can go to the closest available emergency room and all or most of the cost of care will be covered.
What is a high-deductible plan?
There are also some high-deductible plans that allow you to squirrel away pretax dollars in a health savings account, or H.S.A., that you can draw from to cover health expenses. But these require you to pay for a lot of your care before they kick in.
When you’re shopping around and comparing the prices of plans, it’s critical to find out about all of the costs involved in coverage. You must pay your premium every month, or your coverage will be discontinued. But there are other fees as well, which are called “cost sharing.”
What if I have a major medical emergency?
You are protected on the high end by a maximum limit on your out-of-pocket expenditures per year, which will be capped at $7,150 for 2017 for most plans. That peace of mind, said Ms. Pollitz, is what insurance is really all about.
What other extra costs do I need to know about?
Co-pays are flat fees you pay each time you get a medical service. You may also be required to pay a percentage of the cost of a service. You may also have different annual deductibles for different types of care (such as hospital care, laboratory tests or pharmaceuticals). All the costs are detailed in a document called the “summary of benefits and coverage,” or S.B.C.
What if I only need an annual flu shot and birth control pills?
Make sure you choose a plan that offers what is called “minimal essential coverage,” which means it complies with the requirements of the Affordable Care Act and covers free preventive care like an annual checkup and birth control.
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