This guide can assist in helping you know what questions to ask and how to compare plans when looking for a health insurance policy.
You have several options to get health insurance for yourself. Each state differs in what carriers, plans and coverages are available, but the process for shopping for and signing up is generally the same.
Health Insurance Agent
The great thing about health insurance agents is that they will (hopefully) be able to present all the best options for your situation. They can walk you through available individual or family plans and, if applicable, find a business plan that may fit your needs. You’ll have someone to explain the pros and cons for plans in detail. Even so, you’ll need to be prepared to ask the right questions so, be sure you are familiar with all the terminology so you can compare apples-to-apples if you decide to go this route. You can do an online search for an agent in your area. They differ state to state.
If you need help finding an agent, we recommend:
Private exchanges like eHealth and HealthInsurance.com consolidate and present choices based on answers to some basic questions; they are like online agents. (Some even have agents you can talk to.) Be sure you understand the basic concepts and are able to really understand what is covered, and even more importantly, what is not covered in each plan. For example, there are now plans that require a 12-month waiting period for pre-existing conditions, so if you have a pre-existing condition, you may want an ACA plan, that does not allow a pre-existing condition clause.
The Freelancers Union is free to join and offers health insurance plans for members as well as dental, life and disability insurance. Because of the size of their 375,000 membership base, they may have negotiated rates with providers in certain areas.
Local Chamber or Business Group
National business groups like the Alliance for Affordable Services and the Small Business Service Bureau offer a wide range health insurance benefits and your local Chamber of Commerce may offer a group plan as well. Note that these group generally do NOT offer plans that cover everything. In fact, you may need several plans (e.g. accident policy, ambulance coverage, prescription drug plan) to get the same coverage as a single ACA health plan. Again, learn the terminology and read carefully, what the plan offers to be sure that you’re covered, especially in case of an emergency.
Business Group Coverage
If you have one or more employees, or if you’ve been paying yourself with a W-4 for at least one year, you may qualify for Business Group Coverage. There are usually more plan options in this category and pricing may be less than individual or family plans. When you’re shopping for plans, look for small business plan availability to learn what is available in your state.
Short-term or Temporary Insurance
If you’ve missed an open enrollment period or are waiting for your plan to kick in, a short-term or temporary insurance plan can hold you over until you have regular health insurance. These plans are very limited yet good to have in case of an emergency. You can usually find short-term plans at a Health Exchange or see other options by Googling “temporary health insurance".
Since the ACA – also referred to as Obamacare – went into effect in 2014, you are able to shop for individual health insurance plans online. The best thing about the ACA site is that there are minimum coverage requirements like prescription drugs, mental health services, hospitalization and more. There are Gold, Silver and Bronze plans: Gold being the most expensive and offering the most coverage, bronze being the most affordable with the least coverage and Silver being in between. That said, some catastrophic plans with less coverage may be available in some states so be sure to check the fine print when comparing plans.
Let’s define the components of health insurance so you know what you’re comparing when you shop for a plan.
- Plan premium
- The plan premium is the amount you pay each month for your health insurance.
- Your deductible is what you pay out-of-pocket before the insurance company begins paying for care. For example, if you have a $2,500 deductible, your insurance does not pay for anything until you’ve paid $2,500 first. (Note that there are some exceptions, like primary care services, but we will cover this later.)
- Once your deductible is met, the co-insurance is the percentage you will pay for services. Let’s say you have a plan with a $3,000 deductible and 30% coinsurance. You have surgery that costs $10,000. You will pay the first $3,000 (your deductible), leaving $7,000 due. Your coinsurance cost is $2,100 (30%), leaving your insurance paying $4,900.
- The copay cost is a fixed amount you pay for a health care service that is generally due when service is rendered, and these copay amounts are not applied to your deductible. There are usually different copay amounts for different procedures and drugs. For example, if you have a $45 copay for a primary care physician visit, you’d pay $45 to the doctor’s office before your check-up and that would not apply to your deductible.
- Out-of-pocket maximum
- The out-of-pocket maximum is the most you will have to pay in one year before your insurance begins to cover 100% of costs.
Now that you have some basic definitions, here the types of plans that you will most likely compare when shopping for coverage.
Individual and Family Plans
On first glance, having an HMO plan may seem restrictive. However, if you live in a big city, and do not travel, health providers like Kaiser Permanente offer a full range of services and a wide variety of doctors and locations.
If you travel frequently and want a bigger network; or if you wish to have the flexibility of seeing who you want, when you want, you’ll pay more for a PPO, such as BlueCross/BlueShield and have more choices.
Updated about a year ago