Health Insurance is a type of insurance that offers coverage to the policy holder for medical expenses in case of a health emergency. A health insurance plan chosen by the insured provides coverage for different expenses including surgical expenses, day-care expenses, and critical illness etc. You really need to know How To Compare Health Insurance Plans to see which one is right for you, interestingly, this post post is for you. Continue reading below.
How To Compare Health Insurance Plans
When comparing health plans, whether through the marketplace or any other insurance type, you should take the following steps to prepare. You won’t be able to properly purchase health insurance quotes without the following information. That being said you won’t need every piece of information for every insurance type, so don’t stress too much if you are missing something. Just do the best you can do to collect everything below.
1. Gather the basics. This part is pretty easy, but in order to make sure you can enroll in any health insurance type you’ll want to gather these basics.
- Last years tax information for you and your family
- Projected incomes for this year (discussed more below)
- Medical history – ObamaCare does away with pre-existing conditions and gender discrimination so these factors will no longer affect the cost of your insurance. Smoking, weight and age still all affect cost. (discussed more below)
- Social Security Numbers (or document numbers for legal immigrants)
- Employer and income information for every member of your household who needs coverage (for example, from pay stubs or W-2 forms—Wage and Tax Statements)
- Policy numbers for any current health insurance plans covering members of your household.
- A completed Employer Coverage Tool for every job-based plan you or someone in your household is eligible for. (You’ll only need this if you shop on the Health Insurance Marketplace. You need to fill out this form even for coverage you’re eligible for but don’t enroll in.)
2. Figure out your projected healthcare needs for next year. By knowing how much care you and your family will use, you’ll be able to purchase a health plan that meets your exact needs. This will help you avoid overbuying and underbuying, two of the top reasons people overpay in health care. To do this you would want to gather the folowing:
- Gather your total medical spending for last year
- Expected medical spending for next year
- A list of drugs you’ll need to use this year
- A list of doctors and hospitals you want to use
- A list of ongoing medical issues
- Any other known medical services you’ll need including checkups, screenings, blood-work, etc
- Remember you can’t be charged more for health status or gender any more, so always be honest about ALL your medical needs.
3. Figure out your projected income for next year. In almost every insurance type, what you pay will be based on your household Modified Adjusted Gross Income for this year, not last year. The more income sources you have in your household harder this is to project, as a rule of thumb you should always err on the side of caution. If you project too low you could end up owing more or not qualifying for help that your projected income qualified you for. If you project too high you may not get all the assistance you qualify for, but in some cases you can deduct it from your taxes at the end of the year and make up for it then. To properly figure out your income for next year you’ll want to know the following below:
- Last years income and this years projected income
- How the federal poverty levels work and what percentage of the federal poverty level your household will be for next year.
- If anyone is changing jobs, if you will add a new dependent, or if generally any change that may affect your income and household size
Choosing a Health Insurance Delivery Type
To determine what health insurance type is right for you and your family you should actually be pretty straightforward. So let’s do a quick list and present your choices based on your income and life situation.
If you are offered coverage through work. You’ll go with employer based coverage. It’ll be rare that you’ll want to shop around for quotes, but if you do want to just keep in mind you won’t qualify for marketplace cost assistance. If you are a dependent and have access to employer based coverage through a family member you won’t qualify for cost assistance either.
If you are over 65. We are going to be looking at Original Medicare and Supplemental Medicare in most cases. You can’t buy private insurance outside of Medicare, but you can still retain specific insurance types past 65.
If you are under 26. Stay on your parents plan or get covered through school. If that is not an option get Medicaid or subsidized marketplace coverage.
If you are under 30. Consider a catastrophic marketplace plan if you are young and healthy, go with Silver if you take meds and use services.
If you make less than 138% FPL. You qualify for Medicaid in state’s that expanded Medicaid. If your state didn’t you can see eligibility guidelines here.
If you make between 100% – 400% FPL. You qualify for marketplace cost assistance on the Health Insurance Marketplace. The less you make the more likely it is that this is your best option. If you are also under 30 then
If you make over 400% FPL. You can shop for any private insurance inside or outside the marketplace. You won’t get cost assistance, but you have options. With great options, comes great responsibility to shop smart.
None of these apply to you. There are lots of health insurance options out there.
If you are using the Health Insurance Marketplace, getting covered outside the Marketplace, or Have Medicare you have an extra factor to consider: Plan Categories.
Plan categories should not be confused with health insurance delivery types like Medicaid or Medicare, and should not be confused with traditional plan types like HMOs or PPOs. That being said we could easily refer to any of these as categories or types, and you very likely will while searching around the internet.
Marketplace Plan Categories “Metal Plans”
There are 5 categories of Marketplace insurance plans: Bronze, Silver, Gold, Platinum, and Catastrophic. Plans in these categories differ based on how you and the plan share the costs of your care. The categories have nothing to do with the amount or quality of care for covered benefits. But here are some quick tips:
All marketplace plans have a maximum out-of-pocket cost no more than $6,600 for an individual and $13,200 for a family for 2015 and must provide at least ten essential benefits as part of their covered benefits. When you shop for coverage your focus should be on cost sharing and networks since all plans cover the essentials and protect your wallet in an emergency.
Bronze Plans have the lowest premium and lowest cost sharing. If you get one of these plan on paying for most of your out-of-pocket expenses on your own.
Silver Plans are the marketplace standard. These are the only plans that qualify for Cost Sharing Reduction subsidies for lower out-of-pocket costs and the plans that tax credits are based on. A smart buy for most folks who get access to subsidies.
Higher grade metals have better cost sharing and tend to have wider networks. So if you have a big family or a lot of medical needs you may want to shoot for Gold or higher.
Catastrophic plans are only for the young and healthy. They won’t cover much of anything outside of emergencies.
All health plans sold on the marketplace are sold by Private insurers. Many qualified brokers, agents, and providers outside of the marketplace can help you shop for a marketplace plan. That being said always make your first stop Healthcare.gov.
Medicare Plan Categories: Supplemental Plans
There are 5 categories of Medicare insurance plans:
- Original Medicare (Part A & Part B)
- Medicare Advantage (Part C)
- Medicare Prescription Drug Coverage (Part D)
- And Medigap
Most seniors will want to enroll in Part A&B during their initial enrollment period. Most seniors will also want to enroll in C with a drug plan or Part D and Medigap. Pair any of these options to ensure you avoid missing enrollment periods and missing the coverage you deserve.
Medicare Part A & B are public healthcare. The other parts are all sold by private insurers. Many qualified brokers, agents, and providers outside of Medicare can help you shop for a supplemental Medicare plan. That being said always make your first stop Medicare.gov.
Choosing a Health Plan
Now that you know what health insurance types you need it’s time to learn how to compare out-of-pocket costs, premiums, networks, and benefits to find the right plan. When you shop online you’ll have a basic benefits sheet for health plans you are looking at. This will include the premiums, out-of-pocket costs, networks, and benefits.
In order to choose Health Plans that will cover you properly you’ll want to see our section on How to safely buy Short-Term health Insurance | Get a quote on short-term health insurance.