What should you think about before you shop?
Remember, a health plan is there to help you cap your health care costs. Making informed choices with respect to these four plan features will have a BIG impact on what you spend for care, and how you’ll spend it:
- How much financial protection you’ll get (coverage level)
- Where you will receive care (provider network)
- How you will pay for the cost of your care (plan type)
- How your medications are covered (preferred drug list)
It pays to consider your health care needs, your financial resources and your comfort with risk and volatility. Focus on these items, plus a few extra things, to find the best plan for you.
1. How much financial protection do you need?
There are a lot of numbers to consider in shopping for a health plan. The premium is just part of the story. Take all the costs into account – premiums, deductibles, copays, coinsurance and out-of-pocket maximums – you’ll want to make sure they add up in your favor.
Your answers to the questions below can point you toward the best coverage level based on your estimated use of services. (also see How much financial protection will you get?)
Sudden illnesses and injuries are unpredictable, of course, but most people have an idea of how healthy they are in general and how their health affects the medical services they use.
How would you describe the number of doctor visits and prescription drugs you're likely to use in the next year?
Consider a gold plan. Gold plans emphasize peace of mind and don’t require you to pull out your wallet as often. The premiums are higher, but how much you pay when you receive services (out-of-pocket cost) is lower than other plan options. If you know you’re going to need a lot of medical care during the year, this type of plan might be just right for you.
Consider a silver plan. Silver plans represent the middle range of premiums and out-of-pocket costs. If you know you’ll use some health services in the next year but aren’t sure if they’ll end up on the high or low side, a gold or silver plan should cover your bases.
Consider a bronze plan or a catastrophic plan (only an option if you’re under age 30 or have a hardship exemption). These plans emphasize paying for medical services if and when you use them. The premiums are low, but out-of-pocket costs are high. If you’re very healthy and rarely use medical services during the year, you could come out ahead. These plans are a good way to get financial protection on a budget.
2. Where do you want to receive care?
Every health plan has a network of providers, clinics, pharmacies and hospitals for you to use when you receive care.
When picking a plan, you are selecting the network that will be available to you. There’s a tradeoff you need to consider. Plans with big networks and a wide selection of providers generally have higher premiums. Plans with more localized, smaller networks generally have lower premiums. Choosing a plan with a smaller network can save you on premiums, but if you aren’t satisfied with the choices your network provides, you will end up paying significantly more for services provided out of your network.
We can’t stress enough the importance of choosing a health plan with a network that meets your needs, and always using network providers when you need care. Check out our Tip Sheet on out-of-network care to learn more about the financial risks you face when you use a provider who is not in your network.
Read Out-of-Network Tip Sheet »
To see if your doctor is covered, search Medica’s networks.
3. What plan type fits you?
There are three basic plan types – high deductible/HSA-compatible plans, copay plans and catastrophic plans. When deciding which plan type is right for you, think about whether you can handle unpredictability in terms of when health care costs occur and how much you’ll have to pay at any given time.
A high deductible or HSA plan has the following features:
- You pay 100% of the costs of your care and prescriptions until you meet your deductible.
- After you meet your deductible, you will pay coinsurance, a lower percentage of the costs of your care (typically 20 to 40 percent depending on your policy).
- After your payments total an amount stated in your plan, your insurance company will pay 100% of the cost of your care.
- You can use these plans with a Health Savings Account (HSA).
Note:
- The insurance company pays 100% for preventive care even if you haven’t fully paid your deductible.
- An HSA allows you to use tax-deductible dollars to pay for eligible medical expenses for you, and anyone covered by your plan. This may save you money on medical expenses, taxes and increases your spendable income.
- Check out our Tip Sheet on HSA accounts to learn more about the benefits they offer.
Read HSA Tip Sheet »
A Copay plan has these features:
- You pay a flat fee called a copay for routine care and some prescriptions, plus 100% for other medical services, until you meet your deductible. Your policy spells out which services have copays and which don’t. A typical copay amount could range between $35 and $50.
- After you reach your deductible, you continue to pay a copay for certain services. For all other services, you pay a coinsurance, which is typically 20 to 40 percent of the cost of services depending on your policy.
- After your payments total a set amount, your insurance company will pay 100% of the cost of your care.
Note:
- The insurance company pays 100% for preventive care even if you have not fully paid your deductible.
- Copay plans do NOT work with a health savings account (HSA).
A catastrophic plan offers less protection, but lower premiums. The plan has a $8,550 deductible. When the deductible is met, the out-of-pocket maximum is also met.
- You will pay a copay for the first three office visits, plus 100% for all other medical services until you reach $8,550. Your policy will spell out these terms.
- After your payments total $8,550, your insurance company will pay 100% of the cost of your care.
Notes:
- To buy a catastrophic plan, you must be under age 30 or receive a hardship exemption from the health insurance marketplace that serves your state.
- The insurance company pays 100% for preventive care even if you have not fully paid your deductible.
- Catastrophic plans do NOT work with a health savings account (HSA).
How would you describe your comfort with unpredictability in your medical expenses?
High deductible/HSA-compatible plans and catastrophic plans generally have lower premiums, but you will pay most of your expenses for medical care and prescription drugs up front, before the plan starts to pay. If you don’t anticipate needing a lot of medical services, but could handle an unexpected expense up to the amount of your deductible, consider one of these plan types.
Copay plans generally have higher premiums, but for many routine services, you’ll pay only the fixed copay amount, even if you haven’t fully paid your deductible. Copays are the most predictable way to pay for your care. Copay plans are great for people who know they’ll be using health care services and want to anticipate what their costs will be.
Our Info Kits offer additional information about how to select the plan that is best for you, based on your circumstances.
Order a kit
4. How will your prescriptions be covered?
Every plan has a Preferred Drug List that defines the drugs that are covered and how much of the cost you will be responsible for paying. If you take prescription drugs, take time to check out whether your drugs are covered and what your share of costs will be.
- Are your current prescriptions covered by this plan?
- How will you pay for your prescriptions under the plan? Is there a copay or coinsurance? Will you pay the full price for drugs before a deductible is reached?
- Are the pharmacies in the network convenient for you?
Here’s a link to Medica’s drug lookup tool where you can see how any medication you are on would be covered.
View drug list search
If you can’t find the answers here, call us and we’ll be happy to help you out.
What else should you consider?
Insurance companies often offer programs to help their members stay well. If you find yourself torn between multiple plans that meet your criteria, your decision could come down to a member program that sweetens the deal.
Extras to look for:
- Discounts on fitness club memberships, healthy foods or medical equipment
- Rewards for having or developing good health habits
- Programs to help you stop smoking
- Programs to provide health support during pregnancy
- 24-hour nurse line
- Access to online health care services