Top Tips for Buying Health Insurance

Purchasing health coverage is essential to protect against unexpected medical costs. However, the range of plan options and insurance lingo can make selecting the right health insurance policy seem daunting. This guide will walk through key factors in choosing appropriate coverage, demystify common terms, and provide money-saving tips for buying affordable yet adequate health plans.

Having proper health insurance safeguards your finances and access to care when illness or injuries arise. Let’s explore smart strategies for getting the protection you need at a cost fitting your budget and lifestyle.

Types of Health Insurance Plans

Health plans fall into two primary categories:

Employer-Sponsored Group Plans

Offered by employers to employees and families
Typically share premium costs with employees
Remains active even if leave job through COBRA continuation

Individual and Family Plans

Purchased directly from insurer or public Marketplace
Must pay full premiums yourself
Provide options outside employer coverage

Those insured through work may still buy individual policies to supplement gaps in employer benefits. Having choices maximizes ability to customize plans optimally.

Health Insurance Essentials

All policies contain key components affecting coverage and costs:

Premium – The recurring amount paid, usually monthly, for coverage. Premiums rise as you age.

Deductible – The amount you pay out-of-pocket before insurance kicks in. Often $500-$2000 per year.

Copays – Flat fees per doctor visit, prescription drug purchase, or hospital stay. Like $20 per doctor visit.

Coinsurance – The percentage you pay on medical services once meet deductible. Such as 20% of an MRI cost.

Out-of-pocket maximum – The most you would pay in a year through deductibles and coinsurance. Typically $3000-$8000.

Balancing these amounts allows tailoring cost sharing with the insurer based on budget and health risks.

Health Insurance Buzzwords

Learning common insurance terms helps comparing plans:

HMO – Health Maintenance Organization. Must pick a primary care doctor to coordinate care. Not needed for emergencies.

PPO – Preferred Provider Organization. See any doctor but pay less when choosing “in-network” providers.

EPO – Exclusive Provider Organization. Only covers doctors in network except for emergencies.

POS – Point of Service Plan. Combines HMO and PPO features.

HDHP – High Deductible Health Plan. Lower premiums but deductible over $1000 before coverage. Often paired with HSA.

HSA – Health Savings Account. Special savings account to pay medical expenses tax-free when paired with an HDHP.

Don’t let jargon deter you. Policies boil down to network rules, deductibles, and premium/copay/coinsurance costs.

Choosing Health Insurance Networks

Health plans contract with certain doctor and hospital networks to offer discounted pricing. This impacts providers you can see and out-of-pocket costs. Main options include:

PPOs – Allow visiting any doctor or hospital but pay less when selecting “in-network” providers. Most flexible but costlier.

HMOs – Generally mandate a primary care physician to coordinate referrals and care. Cheaper but less choice.

EPOs – Only cover “in-network” providers except for emergencies. Limit choices but offer lower rates.

Review network directories when selecting plans to ensure preferred doctors and hospitals participate. Don’t sacrifice provider access just for lower premiums.

Health Insurance Deductibles

Deductibles represent what you pay out-of-pocket before coverage kicks in. Options include:

Low Deductible – Under $1000 is considered low but means higher premiums. Good if anticipate significant medical expenses.

Standard Deductible – $1000 – $2000 range offers a balance of premium affordability and deductible risk.

High Deductible – Over $2000 means lower premiums but you pay more upfront before coverage starts. Must budget carefully.

HSA-Eligible – To contribute to a Health Savings Account for tax-advantaged medical savings and payments, your deductible must be at least $7000 for individual coverage or $14,000 for family coverage.

Evaluate your expected health care usage and budget when choosing deductibles. Don’t sacrifice premium savings but bear unaffordable upfront medical costs.

Comparing Health Insurance Plans

When comparing health insurance policies, look at:

Premium costs and whether employer pays a portion
Deductible amounts before coverage
Doctor and hospital networks included
Copays and coinsurance percentages you pay
Total out-of-pocket maximums per year
Covered services like prescriptions, dental, vision
Ability to see specialists without referrals
Domestic and international coverage breadth

Get quotes accounting for all family members needing coverage. Factor total costs based on likely health care usage, not just monthly premiums.

Supplemental Insurance Options

In addition to comprehensive medical insurance, supplemental policies add further protection:

Dental insurance helps pay braces, cleanings, fillings, crowns and other dental costs.
Vision insurance covers eye exam costs, glasses, contacts and sometimes laser eye surgery.
Critical illness insurance pays cash benefits if diagnosed with major conditions like cancer, stroke or heart attack.
Accident insurance covers expenses from accidental injuries like emergency room visits, surgeries, hospitalization and physical therapy.

While not mandatory, these plans provide affordable additional coverage to pay for routine care and unexpected needs traditional health insurance may not.

Choosing Health Insurance Providers

When selecting an insurance company, look for:

Strong financial ratings indicating ability to pay future claims
High customer satisfaction and claims service reputation
Comprehensive doctor and hospital network access in your locality
Digital experience with easy online/mobile tools to manage policy and costs
Member perks like gym memberships, smoking cessation programs, and patient advocates
Discounts for bundled policies, paying annually, or maintaining wellness

Don’t just shop by premium cost alone. Vet insurer reputation, provider networks, and member resources for the full picture.

Buying Health Insurance When Self-Employed

Those self-employed or without employer coverage have options in the individual market:

Public Health Insurance Marketplaces – Created by Affordable Care Act at Healthcare.gov. Provide subsidies if household income under 400% of federal poverty level.

Direct Shopping – Get quotes and purchase policies directly from private insurers without subsidies.

Group Health Insurance – Join groups like professional associations, alumni organizations, or non-profits offering group rates.

COBRA – Carry over employer coverage for 18 months by paying the full premiums yourself.

Spousal Insurance – Get added to spouse’s employer plan, typically within 30 days of losing other coverage.

Shopping rigorously, using tax credits if eligible, and exploring group options provide avenues to secure coverage if not insured through an employer.

Getting the Best Health Insurance Rates

Tips to get lowest pricing on policies:

Compare quotes across at least 3 major insurers
Raise deductibles to lower premiums if cash reserves allow
Limit plans to essential services needed, such as excluding dental
Choose HMOs or EPOs which cost less than PPOs
Select generic prescription drug coverage with exclusion for name brands
Enroll in and maintain wellness programs to qualify for discounts
Avoid tobacco use surcharges by testing nicotine-free
Pay premiums annually rather than monthly to avoid fees

Taking advantage of cost-saving measures significantly reduces annual insurance expense.

Shopping for Health Insurance Checklist

When reviewing and comparing health plans, be sure to:

Confirm your doctors participate in-network
Obtain specialist details like referrals and coverage
Know if specific medications are covered
Understand annual deductibles and max out-of-pocket costs
Factor in dental, vision, mental health benefits
Compare total premium costs including subsidies
Weigh HMO, PPO or EPO provider networks
Review exclusions like pre-existing conditions
Check enrollment periods to avoid waiting periods

Doing your homework upfront prevents unwanted surprises later on. Never enroll in a plan you don’t completely understand.

Saving Money on Health Insurance Costs

Ways to reduce the expense of health insurance include:

Choosing higher deductible plans to lower premiums
Contributing to an HSA to pay expenses tax-free
Enrolling in wellness programs to qualify for lower rates
Comparing prescription drug costs across plans
Seeing in-network doctors and facilities only
Taking advantage of free preventive care services
Checking if services are covered before seeking care
Negotiating costs and requesting discounts for major treatment
Paying premiums annually vs monthly to avoid fees

With smart planning, sufficient yet affordable health insurance is within reach.

Why Health Insurance Matters

Too many families lack proper health coverage and risk bankruptcy from medical crises. Disaster strikes when sickness means draining savings or going into debt just to receive care. But with education on plan choices and smart shopping, individuals can secure affordable protection tailored for their needs, budget, and risks. Although entailing some cost, adequate health insurance brings peace of mind and keeps finances intact even when the unthinkable happens. Don’t let confusion over policies paralyze you from getting covered.