As of 2020, over 30 million Americans were not covered by health insurance. Maybe you are currently one of them – or maybe you will soon turn 26, and no longer receive health coverage under your parents’ plan.

In any event, picking the right health insurance plan may seem intimidating. Many different plans are available, and they are all attached to words you have heard before without really thinking about their meanings. Here is what you need to know before you begin reviewing policies.

Understand the Key Factors of a Health Insurance Plan

Many details distinguish different health insurance plans from one another. Three are most important: deductible, network and prescriptions.

Deductible – Health insurance doesn’t pay the entirety of every medical expense you could incur. Typically, you must pay out of pocket up to a certain amount before your insurance provider begins covering part or all of your medical bills. This amount is called the deductible. Plans with higher deductibles are more affordable because insurance providers are assuming less risk of paying out. Conversely, plans with low deductibles are more expensive, although the added expense can easily prove worthwhile if the policyholder requires extensive medical care.

Network – Your insurance provider most likely will not cover your medical care if you did not receive it from one of their preapproved healthcare providers. In other words, your insurance plan is only good within your insurer’s network. If you already prefer a certain doctor or healthcare specialist and wish to continue seeing them, then it is important to determine whether they are included in your potential new plan’s network.

Prescriptions – Most American adults take prescription medications. If you’re in the majority, then you must review how a potential plan copays or coinsures the medications you are currently taking. A plan which covers most or all of your prescription fees is naturally most appealing – although that doesn’t necessarily make it the most cost-effective option.

 

Understand Your Marketplace Options for Insurance

There are three primary health insurance marketplaces: employer, state and federal. If your employer offers a health insurance plan, then they are almost certainly your best choice of marketplace. That’s simply because your employer will pay a large portion of your premium on your behalf!

If your employer does not offer health insurance, then you may visit healthcare.gov, click “See if you can enroll,” and enter your zip code. The website will direct you to your state’s health insurance marketplace – or, if your state does not have one, the federal marketplace. Alternatively, you may purchase health insurance directly from a private agency such as McKinneyOlson Insurance in South Dakota.

 

Understand the Different Types of Health Insurance Plans

HMO. EPO. POS. PPO. Most Americans will select one of these four types of health insurance plans. The plan you choose will affect the network you can receive medical care from, the deductible you would have to pay before your insurance provider steps in, and the benefits you can expect to receive. The best plan for your situation depends heavily on your medical needs and how much you can afford to pay.

Here are short overviews of the four major plans to help you tell them apart during your search:

Health Maintenance Organization (HMO) – Restricts coverage to a network of healthcare providers that work directly with the HMO. Unless there is an emergency, the HMO will not cover care received from outside its network.

Exclusive Provider Organization (EPO) – Similar to an HMO, but typically with a broader network. An EPO will not also cover out-of-network care unless there is an emergency.

Point of Service (POS) – Allows policyholders to visit out-of-network healthcare providers, but provides a financial incentive to remain in-network. Receiving coverage for out-of-network care requires a referral from an in-network doctor.

Preferred Provider Organization (PPO) – Allows policyholders to visit out-of-network healthcare providers without first receiving referrals.

 

Consider Your Unique Health Needs

As you sort through all the available health insurance plans, never lose sight of what you specifically need to enjoy the greatest peace of mind for a price you can still afford. For example, you must select a plan with a network that includes a conveniently located healthcare provider. If you live in a rural area where clinics and hospitals are few and far between, that may significantly limit your pool of acceptable choices.

Consider the chances that you will require medical care in the near future. If you have a preexisting medical condition or enjoy high-risk leisure activities, you may do best with a low deductible. But if you are currently enjoying good health and actively avoid activities which carry a risk of injury, then a high-deductible plan may cost you the least money in the long run.

If you are a first-time health insurance buyer in Sioux Falls, Brandon or Tea, SD, then we welcome you to contact McKinneyOlson Insurance today. Our agents are standing by to help make sense of health insurance for you, and guide you to the policy that provides the best balance of security and affordability.