Whether you're covered through your employer's plan, through a government program like Medicare, or you're buying coverage on the individual market, you probably will need to review or change your health insurance details at least once per year. If that time has come around for you now or in the near future, here's what to look for in a new health insurance plan, or what to know if your existing coverage is changing.
Open enrollment
Health insurance law dictates that you are only allowed to make changes to your health coverage plan at certain times, depending on certain details. The time when you are allowed to make changes to your health insurance plan is called open enrollment. Here are some important facts and dates to know about open enrollment depending on the type of plan you need:
- If you are eligible to receive health insurance through your employer, your open enrollment period comes once per year, and is usually in the fall. Open enrollment also applies if you've just started a job at a new company.
- If you're eligible for coverage through Medicare, open enrollment works a little differently. Most people are automatically enrolled in Medicare when they turn 65 years old and are already eligible to receive Social Security benefits. You can make decisions about your coverage at that time. For those already enrolled, the general Medicare open enrollment period for 2017 runs from Oct. 15 to Dec. 7.
- If you're eligible to purchase health insurance through a state exchange, 2017 open enrollment runs from Nov. 1 to Dec. 15 for coverage plans beginning Jan. 1, 2018.
Visit Healthcare.gov for more detailed information about all of these health insurance types, including special enrollment periods and eligibility.
How to choose insurance
If open enrollment has come around and you're considering switching or making a change to your coverage, there are a few major details worth paying close attention ro in order to make the most practical choice. Remember that if you're getting coverage through an employer-provided plan, you probably won't have a lot of options for customizing your insurance, but it's still helpful to know the basics of every plan. First, take a look at the plan type, which will give you a lot of useful, general information about how to leverage that plan. Here are the most common types of health insurance plans and who they might work well for:
- Health maintenance organization (HMO): These plans offer low out-of-pocket costs and a primary care doctor who can coordinate your care. However, that primary care provider and any other physician you visit needs to be within the HMO's network (except for emergencies), or your out-of-pocket costs will be very high.
- Preferred provider organization (PPO): A PPO usually involves higher out-of-pocket costs than an HMO, but allows more flexibility in choosing doctors. There is still a network to work within for a PPO, but it is often very broad. You also won't need a referral to see a specialist.
- Exclusive provider organization (EPO): This is like a hybrid of the two above plans, in that it will cover doctor visits and procedures within a certain network, but does not require referrals to see specialists. EPOs offer low out-of-pocket costs, but usually involve a more restrictive care network than even an HMO.
Make sure the plan you choose includes a coverage network that works well considering how far you can travel, specific doctors you want to see and other details, especially if your plan offers low costs for in-network treatment only.
With all of that sorted out, it's time to consider what you need from a health insurance plan considering your budget and any particular benefits you expect to utilize. To do so, first consider the premium and out-of-pocket costs for each plan under review.
The premium is the most basic cost that you'll need to consider, since it's what you can expect to pay each month regardless of the services you use. Remember that more restrictive plans like HMOs usually come with lower premiums at the expense of a smaller network, while PPOs tend to require more costs out-of-pocket in exchange for greater freedom of choice when it comes to managing your own care.
Beyond premiums, health insurance costs will come in three major forms:
- Copay: A fixed amount that you will pay each time you use certain services, like visits to a doctor's office or refilling a prescription. These tend to be lower for routine office visits and generic drugs, but higher for specialists and more advanced medications.
- Deductible: If you submit a claim for your insurer to cover, the deductible is how much you will need to pay out-of-pocket before your insurance kicks in. In general, the lower your plan's premium is, the higher the deductible will be, and vice versa.
- Coinsurance: If you exceed your deductible amount, coinsurance dictates how much you will pay afterward. After you've paid both your deductible amount and coinsurance, you won't need to pay anything else once reaching the out-of-pocket maximum for your plan.
