Your health is way too important to leave to chance. That’s why it’s critical that you have health insurance and that it is the right fit for you and your family. Unfortunately, millions of Americans do not know if their health insurance plan will cover their needs—or how to secure better coverage.
A good health insurance plan—one that covers every potential need—goes a long way toward providing peace of mind and helping avoid a financial burden that otherwise would saddle you and your family with payment of major medical expenses. Ideally, you should have a more comprehensive plan that provides coverage for hospital, surgical or routine medical expenses. But, at minimum, your health insurance policy should cover major medical expenses resulting from catastrophic illness or injury.
Many Americans secure health insurance through their employer; others are not so lucky. But even if you have a primary policy, be aware that group benefit plans do not always provide all the coverage for your needs. You may want supplemental insurance or a health savings account (HSA) to help fill the gaps.
For those purchasing their own primary or secondary health insurance policy, the options can seem confusing and expensive. So, how do you know if your health plan is a good fit for you? Here are some tips:
- Evaluate your family’s needs. Consider your family’s lifestyle and medical history, and try to anticipate life-stage health events, such as braces for your pre-teen and glasses for your self. Wife turning 40? That means mammograms every year.
- Prioritize those needs. For example, vision care may be a good benefit for your family, but not as essential as a prescription-drug plan. List your must-haves as well as your nice-to-haves.
- Review plan options. For each plan you are considering, ask about key coverage provisions: Does the policy cover major medical expenses only? If your family needs preventive, dental and vision care, does the plan provide them? Does it include a prescription drug plan? Do any of these must-haves need to be purchased separately? Are your current doctors in the plan? Does a family member have a pre-existing condition and will the plan cover it?
- Determine your costs. Premiums are not the only costs you should consider when looking at a health insurance plan. Take into account the expenses you may have to assume beyond paying the premium, such as deductibles, coinsurance and co-payments. Are there added costs for using an out-of-plan doctor or hospital? Consider increasing your deductible for a lower monthly premium.
- Consider an HSA or FSA. An HSA provides two benefits: a tax write-off and a health coverage benefit. The health benefit provides coverage when you are sick or injured and the savings mechanism allows you to accumulate funds that you can use to pay for care for illnesses or injuries not covered by your insurance. An added benefit of an HSA is that both the cost of the health plan and your contributions are tax-deductible. Similarly, a Flexible Spending Account (FSA) allows you to set aside pre-tax dollars to cover medical expenses, which can help lower your taxes.
- Know the differences of PPOs & HMOs. Individuals in a health maintenance organization (HMO) must choose a primary-care physician from a provider network. This physician is responsible for routine medical care and must refer you to specialists. HMOs typically provide no coverage for services from physicians outside the network. Meanwhile, individuals in preferred provider organizations (PPO) do not choose a primary care doctor and do not need referrals. They can obtain coverage from physicians outside the network but the PPO likely will reimburse less for the services. PPOs require deductibles and co-payments; HMOs don’t have deductibles but participants must pay co-payments. Again, be sure your family’s doctors are in the plan you select.
- Get coverage today. Health insurance, much like life insurance, is usually less expensive for younger people. So, get your coverage now to secure a lower premium and be sure to maintain your coverage.
- Use it. Use your insurance for preventive care and wellness to decrease your risk of needing more serious medical treatment. Schedule routine doctor visits and get the regular tests that physicians advise for your age and condition. Take advantage of the discounts offered by some plans for gyms and weight-loss programs. Seek help for smoking or alcohol abuse.
- Don’t let it lapse. If you lose or leave your job, you may be eligible to take advantage of a COBRA plan. Even though you’ll be footing the whole bill for your health insurance, you’ll be getting the employer’s group rate and retaining coverage for 18 months. If you go without insurance for more than 60 days, it can be trickier and more expensive to purchase health insurance down the road.
- Stay current. Coverage can be affected by life’s changes—if you get married or divorced, for example. And keep in mind that your children will not be covered by your plan indefinitely; generally dependent children lose coverage at 19 (or 22 if a full-time student).