Navigating health insurance plans can be tricky. Open enrollment begins Nov. 1, so now is the time to consider choices for the coming year. Especially if you’re looking for a marketplace plan, it’s a good idea to start your research early, in case the site is periodically down for maintenance again this year.
While searching the health insurance marketplace or choosing between plans provided by your employer, it’s important to understand what each plan type offers, how their terms will apply to you, and what you may have to pay out of pocket each year in addition to the premiums.
There are four types of insurance plans: Health Maintenance Organization (HMO), Preferred Provider Organization (PPO), Exclusive Provider Organization (EPO) and Point of Service Plan (POS).
The most significant difference among these plans is the need for a primary care physician and whether patients will be reimbursed for out-of-network care and if so, at what rate. From there, costs and coverages start to differ.
These plans usually have lower premiums than other plans. Under an HMO, you must choose a primary care physician and the plan won’t pay for non-emergency out-of-network care. However, urgent-care out-of-network costs will be covered. If you want to see a specialist, you will generally need a referral from your primary care doctor.
Many POS plans require you choose a primary doctor, but for a higher out-of-pocket cost, you can seek care outside of your network. If you want to see a specialist, you will need a referral from your primary care doctor.
This plan covers care outside of your network, but in-network care is less expensive out of pocket. You do not need a primary care doctor or referrals to see a specialist. Usually, there are more provider options under PPO plans.
With an EPO, you do not need a primary care doctor. Unless it’s an emergency, these plans don’t cover out-of-network care. If you want the benefits of lower out-of-pocket costs and not needing a primary doctor or referrals, then this plan could be right for you.
Four questions to ask yourself before choosing a plan
Choosing an insurance plan is generally a one-year commitment. Before enrolling, carefully review each plan and consider these questions:
Do you already have a favorite doctor or medical team?
Find out if your health care providers are in-network on your new plan. If not, will you be able to access their care and how much will it cost?
Are your prescriptions covered?
Most plans divide prescriptions into cost tiers, so your cost may vary. If you’re taking prescription drugs, call the health insurance provider to confirm what your out-of-pocket cost will be.
Where do you need coverage?
Most HMO plans and some PPO plans are regional networks, meaning they cover smaller geographic areas. If you spend part of the year living in one location and the rest in another, consider POS or EPO plans.
“These plans can be great for snowbirds who need to maintain routine care, like dialysis,” says Lynn Pokrifka, an insurance broker at Employee Benefit Solutions in Jenkintown, Pennsylvania. “But keep in mind that if there’s an emergency, you’ll always be covered.”
Are you willing to manage paperwork?
Filing claims for out-of-network care can be time consuming. If you don’t want to deal with paperwork and claims, then a managed plan, like an HMO or POS, may be a better choice.
Additional pointers to help you choose
Still confused by jargon and acronyms? It’s a lot to keep track of. If you’re unsure about which plan to choose, here are a few tips:
Plans that pay higher portion of your medical costs, but have a higher premium, are good if: you have pre-existing conditions, take expensive meds on a regular basis, are planning to have child, are expecting to undergo surgery, or have a chronic condition.
If you’re in good health and only go to the doctor for routine checkups, consider a plan with a lower monthly premium and higher out-of-pocket costs.
If you have a chronic illness, keep in mind that navigating plan requirements can pose a challenge. “Timeliness is sometimes of the essence,” says Pokrifka. “And pre-authorizations [with HMO or POS plans] can be very frustrating.” Pokrifka stresses that you’ll get the care you need, regardless of your plan, but some require more effort and persistence while navigating the network.
Do the math to estimate your total out-of-pocket costs. Pokrifka recommends running the numbers based on your history of health care use to determine which plan will best suit your budget. Although you may choose a plan with a lower deductible, premiums and copays should be accounted for while calculating how much out of pocket your plan will cost you; it could end up costing more than a plan with a higher deductible.