A serious illness or injury can leave you with expensive medical bills that strain your finances. Health insurance helps you manage those bills by covering the costs of your medical care. There are many types of health plans available, and each has its own cost structure. Some plans charge a monthly premium, while others have a deductible that you must pay before the insurance begins to cover expenses. Still others have copayments, which are a set amount you must pay for visits or medications. Choosing the right plan depends on your expected medical needs. A plan that has a low monthly premium may be cheaper than one that covers a higher percentage of your costs, but it’s important to understand the total cost of the plan before making a decision.
The Affordable Care Act organizes health insurance plans into metal tiers based on their costs, with bronze and silver plans having the lowest coverage, and platinum and gold plans having the highest. Plans within each tier cover the same essential benefits, but costs vary by insurer and type of plan. A health insurance agent or broker can help you choose a plan that fits your budget.
Depending on your location, the prices of individual and family health plans can be different. This is because the costs of each plan are influenced by the laws, regulations and health care providers in the area. Generally, states with healthier populations have lower health insurance costs.
Some health insurance policies include additional coverage, such as vision and dental, or medical management programs for specific conditions like back pain and diabetes. In addition, the scope of coverage varies by plan, so it’s important to read the fine print and find out exactly what you’re getting for your money.
Consider the deductible and other out-of-pocket costs when selecting a plan. A plan with a higher monthly premium may have a lower deductible, but it might also have a high co-pay or prescription drug costs. For healthy people who don’t see a doctor often, a plan with a high deductible and a low monthly premium can make sense, but it’s not the best choice for those who are concerned about potential large medical costs.
Another thing to consider is how much paperwork you’re willing to deal with. If you want to see a specialist, for example, you’ll likely need a referral from your primary care provider. If you prefer less paperwork, a PPO may be a good option. A PPO has a broader network of providers than an HMO, and you won’t have to worry about paying for out-of-network services if they are covered by your plan.