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How to Pick Health Insurance Companies: What You Need to Know

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Did you know that in 2021, the average estimated spending on healthcare per capita was $13,037? This 2022, experts project it to rise to a staggering $13,591 and $14,170 by 2023.

Without health insurance, U.S. consumers would shoulder most of those expenditures. After all, it covers most medical and surgical expenses incurred by the insured. It even helps pay for preventive care costs, such as physician check-ups.

So if you’re yet to get insured, there’s no better time than now to learn how to pick health insurance companies.

Below, we’ve listed our tips on choosing among health insurance company options, so read on.

Factor in Your Primary Care Provider

Most Americans have a primary care provider, while only about a quarter don’t. If you’re one of those who do, ask your doctor if they’re an in-network provider of insurance companies.

In-network providers are doctors who have network contracts with one or more insurers. Their agreement includes providing quality healthcare services to insured persons at reduced costs. The insurer, in turn, pays the difference between the regular and the discounted fees.

On the other hand, an out-of-network doctor isn’t part of an insurer’s network. So if you visit one, they’d charge you in full since they don’t accept your insurance plan. As a result, you’d have to pay out-of-pocket.

Thus, if your primary care provider is part of an insurance network, you may want to get insured by that company. That lets you take advantage of the discounted rates exclusive to policyholders.

Fortunately, the best health insurance plans have contracts with thousands of providers. So, chances are, your primary care physician and the other doctors you see belong to the same networks. You can then pick an insurance plan with which all your healthcare providers have a contract.

Consider the Services You Need the Most

Suppose you’re one of the 3 in 5 U.S. adults with a chronic health condition. If so, you likely visit one or more doctors frequently and take prescription drugs. As a result, you want to become more fit to improve your health and reduce your symptoms.

Additionally, let’s say you do a lot of domestic and international travel. In this case, you may be at a higher risk of travel-related illnesses.

Using the example above, the health insurance plan you need should:

  • Provide coverage for your needed prescription drugs
  • Offer exercise, fitness, or gym membership programs
  • Provide free or discounted vaccines for travel safety
  • Include domestic and international emergency coverage

Once you find plans that meet your needs, check their insurance terms and conditions. They should indicate the level of coverage provided and which services are free. They must also be clear on requirements and exclusions (fees and services not covered).

Check Each Plan’s Out-of-Pocket Costs

When comparing insurance costs, you’ll see terms like premiums, copays, coinsurance, and deductibles. They’re all out-of-pocket, and you usually have to pay them before your insurance kicks in.

Premiums refer to your monthly, quarterly, semi-annually, or yearly health insurance plan payments. They remain fixed for an entire year but often increase upon renewal due to inflation.

Copays are flat fees you pay every time you undergo a health care service or procedure. For instance, you may have a copay of $20 for a visit to a specialist or to get a lab test.

Coinsurance is a percentage of a health or medical charge you must pay before your plan covers the rest. For example, you may have a coinsurance payment of 20% for surgery or hospitalization. So if a surgical procedure costs $1,000, you pay $200, and your insurance covers the remaining $800.

Deductibles are amounts you pay for covered services before your insurance kicks in. It varies, but if you get a high-deductible health plan (HDHP), your deductible may cost at least $1,400. By contrast, low-deductible health plans (LDHPs) come with deductibles under $1,400.

Another term you must be aware of is out-of-pocket maximum. It refers to the maximum out-of-pocket costs you must cover within a year. Once you’ve paid them all, your insurance plan shoulders the rest.

Decide Between More Coverage or Lower Premiums

The more coverage a health plan provides, the higher its premiums usually are. Conversely, its other out-of-pocket costs, such as copays and deductibles, are lower. This type of health insurance classifies as an LDHP, and it may be best for you if:

  • You have a diagnosed chronic condition, such as heart disease or diabetes
  • You frequently visit your primary care physician or specialist
  • You often require emergency care
  • You must take expensive prescription medications in the long-term
  • You have a scheduled surgery

On the other hand, the lower the premiums you must pay, the higher your out-of-pocket costs. These plans, which fall under the HDHP category, might be better if:

  • You rarely see a doctor
  • Your health is in otherwise good condition
  • You can’t or don’t want to pay high monthly premiums

Some qualified HDHPs may also let you open a health savings account (HSA). An HSA is a tax-advantaged account you can fund or contribute to yearly. You can then use your savings to help pay for qualified expenses like dental or nursing care.

Pay Attention to the Waiting Period

All insurance plans have a waiting period after the health insurance application process. Unfortunately, they don’t provide any coverage during this time. So if you need a health care service or procedure within this period, you’ll likely pay for it out-of-pocket.

The good news is that some health insurance plans have waiting periods as short as 20 to 30 days. Others may have as long as 60 days.

Thus, if you need a health plan to take effect as soon as possible, ensure you pick one with a short waiting period.

That’s How to Pick Health Insurance Companies

Always remember that in the U.S., nurses, doctors, and hospitals charge more than in other countries. Even medicines cost far more here, nearly four times more than in other developed nations. That’s why health insurance, which helps cover some of those costs, is vital to Americans.

So now that you know how to pick health insurance companies, it’s time to find and choose the one that suits you the most.

For more informative health, wellness, and lifestyle guides, check out more of our blog!

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