It's vital to know all your choices before you pick an insurance policy.
Health Insurance is a critical part of your financial plan, and luckily, there are lots of different ways to buy health insurance—each option has its own advantages and disadvantages. This list of questions will help you learn more about the insurance options you’d be interested in so you can move forward to plan, shop, and get covered.
1. What types of health insurance are there?
This is the first and foremost question you should ask yourself when deciding on a plan. And the answer really depends on how involved you want to be in choosing your healthcare provider.
If you would prefer to choose from a predetermined list of healthcare professionals that participate in an insurance plan, then it’s likely you’ll want to stick with either a Health Maintenance Organization (HMO) or a Preferred Provider Organization (PPO) plan.
-
Health Maintenance Organization (HMO): An HMO is a plan that relies on a network of healthcare providers and facilities to deliver health services to their plan participants. With this plan, there’s limited freedom for you to choose a specific healthcare provider. When you do choose a primary care doctor, they’re generally going to need to follow a tight referral program before you can be seen by another specialist. The good thing is that there is less paperwork with this plan compared to others—Almost everything is predetermined.
Note: If you do happen to see a doctor that’s not within the scope of your plan, it’s likely you’ll have to pay the full bill with no help from your insurance.
- Preferred Provider Organization (PPO): A PPO provides more freedom than you’d find in an HMO by allowing you to choose health care providers. But it’s likely you’ll pay more since this plan is still formed around in-network and out-of-network providers—meaning when you get treated by an out-of-network provider, you’ll pay the full cost and then submit a claim to request the PPO plan to refund you the cost. Out-of-pocket expenses are higher with this plan and more paperwork may be required depending if you choose to see out-of-network doctors.
For more help in understanding health insurance, access our Health Insurance Coach here!
If you already have a provider or want to be able to go with any provider you choose, then fee-for-service medical plans are probably best for you. This is conventional health insurance where the participant is required to pay medical bills until the plan’s deductible is met. Once that deductible is reached, you’ll be asked to submit a claim after paying for the care yourself and the plan typically reimburses around 70% to 80% depending on the service and approval of your plan.
2. What is a high deductible plan and is it worth it?
According to healthcare.gov, a high deductible health plan (in 2023) is a plan that has a deductible of at least $1,500 for an individual and $3,000 for a family. However, the out-of-pocket costs—deductibles, copayments, coinsurance, etc.—for an HDHP participant shouldn’t surpass more than $7,500 for an individual or $15,000 per family in a year.
- How it works. In a high-deductible health plan, you pay for all medical costs until the plan’s deductible is reached. After that deductible is reached, coinsurance kicks in and you and your health plan split any future medical costs. Then when you have paid the predetermined out-of-pocket maximum for the plan, your insurance plan covers all health care costs until the year ends and the minimum deductible and maximum out-of-pocket costs reset or you find a different insurance plan.
- Is it worth it? Since an HDHP generally carries lower premiums—the price you or your employer pays to have the plan—it could be worth it if you tend to have few to no hospital visits a year. However, since your and your family’s health is unpredictable, it’s hard to say whether or not this plan is the best decision for you. Because of this level of uncertainty, it’s common for people to pair a high-deductible plan with a health savings account or an HSA.
How does a high deductible health plan work with an HSA (Health Savings Account)?
A Health Savings Account (HSA) lets you set aside income—before taxes are withheld—to pay for qualified medical expenses. This way you can deduct the amount you deposit into an HSA from the income you pay federal income taxes on. Essentially meaning you’ll likely pay less in taxes.
With an HSA and an HSA-eligible HDHP, any money that is put into a health savings account can then be used to pay for deductibles, copayments, and coinsurance until your max HDHP limit has been met and your plan takes over payments. Since unused HSA funds automatically roll over to the following year, you’ll enjoy the benefits of a low insurance premium with the peace of mind that if something terrible were to happen, your HSA has you covered. Play through this quick, 5-minute activity to learn more about how you can make the most of an HSA or FSA.
How can I find low-cost health insurance?
One of the more affordable insurance options is to enroll in a plan through your employer or workplace if they offer it—many of them offer group plans that cost significantly less than other individual plans. If your employer doesn’t offer a health insurance plan or you are ineligible for one, there are other options. Like the Health Insurance Marketplace.
The Health Insurance Marketplace is an online exchange that allows people to browse different health care plans available under the Affordable Cares Act. This act was created to make low-cost, affordable health insurance options available to a higher number of people. So, if you’re looking to find something suitable for your financial needs, the Health Insurance Marketplace is a good place to start.
Some credit unions also offer insurance coverage to their members, and we are no exception to that here at MCT. Feel free to reach out and see what kind of coverage we offer so that your journey to find insurance coverage doesn't have to be a hard one!
Have you looked into Medicare & Medicaid Benefits?
If you or someone you know is 65 or older, disabled, or on dialysis, visit usa.gov to see if you are eligible for Medicare—a medical insurance program.
Medicaid is an assistance program that helps pay for low-income patients’ medical expenses. See if you qualify here.
What is the Affordable Cares Act (ACA) and how does it help?
The Affordable Cares Act is a law that was enacted in March 2010 that provides consumers with tax credits that lower medical costs for low-income households. Since employers aren’t required to offer health insurance plans to employees, the fines that the Affordable Cares Act (ACA) imposes on certain employers, motivate most workplaces to provide it.
Since health insurance is so important, it's a good idea to compare plans and find the one that works best for you. You can purchase Affordable Care Act standardized plans and other types of insurance directly from insurance companies or through a private marketplace—so if you have basic coverage now, it’ll be easy to find that level of coverage elsewhere, if needed. Even if you aren't looking for health insurance, it's worth taking a few minutes to look at options and see how things work. It could save you money in the long run.
