HOW DO I CHOOSE THE HEALTHCARE PLAN THAT IS RIGHT FOR ME?
Today’s question is, how do I choose the healthcare insurance plan that’s right for me?
The simple answer is to make the right decision you need to ask yourself the right questions to assess your needs.
Then take a good look at yourself and let’s get started.
First, do you want basic coverage or more comprehensive coverage?
Basic plans are designed to protect your finances in the event of a major illness or injury, they have higher deductibles, and that’s why monthly premiums are lower.
Let’s say our friend Gary who is usually very healthy has an unfortunate experience while ballooning over the Alps.
His basic plan would help by covering most of the major medical expenses he incurs.
Other plans start paying sooner because they have lower deductibles, but monthly premiums are higher.
They’re a good choice for people who expect to seek medical care more often.
How much can you spend?
Balancing cost and coverage is the key.
Find out the plans deductibles, co-pays, coinsurance percentages, and the maximum out-of-pocket you’d have to pay for the year.
Know what your money is buying.
Are you single or married?
Do you have children?
Picking the right health insurance is a lot like buying a car.
Is a two seater all you need, or will van be a better choice on the road of life?
Does anyone who will be covered need prescription medication frequently?
If so, prescriptions are important to consider in making your plan choice.
Is your doctor part of the plan?
To get the highest level of benefits and save the most money you need to use doctors and facilities that are part of the plans network.
So, be like Gary.
Check the plans provider directory to see if your preferred doctors and hospitals are in it.
Do you want easy access to specialists?
For example, Gary has back problems.
He chose a plan that allows him to go to the specialist uncle George swears by.
You may prefer a different type of plan where you work with your doctor to get all the care you need, including specialists.
It’s your choice.
Do you have other specific needs?
Maybe you’re on the road a lot.
If so, you might want a plan that will cover you whether you’re in New York or New Mexico.
Or maybe you need coverage for mental health or nursing care?
Now is really the time to think about.
It also consider that financial assistance is available to those in certain income ranges to pay for health care costs and insurance.
How can you find out more?
Well, attend employee meetings about your plan, talk to an agent go to seminars that are offered and use the insurance company’s website as a resource.
To sum it up, to choose the plan that’s right for you ask yourself the questions that will help you assess your needs.
Think about the ways you use health care, the medical needs you can foresee, and how you can balance cost and coverage.
So now you know.
WHAT IS AN HSA? HRA? FSA?
OK, now let’s talk about what are HSA, HRA and FSA.
These 3 are tools to help you pay for health care services.
An HSA or “Health Savings Account” is a smart way to pay for out-of-pocket health care expenses.
It’s a bank account that can be used alongside certain health plans, like high deductible health plans.
You decide how much money you want to contribute tax-free each pay period.
Sometimes employers will also contribute.
When you pay for your out-of-pocket health care expenses like doctor’s visits, dental services, eye exams, eyeglasses prescription drugs and more, it’s with tax-free money.
You’re stretching your health care dollars further.
The great thing about an HSA is that you take it with you from job to job the money in the account, whether from your employer or yourself, is yours to keep and always.
Many people have an HSA but they don’t contribute.
Keep in mind the HSA is a good way to be prepared for health care expenses.
It’s nice to know your bank account is safe from big expenses, because you’ve saved your maximum out-of-pocket amount in an HSA.
An HRA is very similar to an HAS, and it stands for “Health Reimbursement Account”.
If you have an HRA, only your employer contributes money, you don’t add a dime.
Your employer determines the out-of-pocket expenses you can cover with your HRA.
Check your benefits materials to learn what your HRA will cover.
You spend money from your HRA on qualified health care expenses.
You roll the money over each year, but unlike the HSA, when you leave your job the leftover money goes back to your employer since you never paid anything.
Lastly we come to the FSA or “Flexible Spending Account”.
A health care FSA helps you pay for out-of-pocket health care like doctor’s office visits, prescription medications, and lab work.
Choose how much money you want to go into your FSA each year and it’ll go into your account in equal installments.
The money you contribute is pre-tax, so you don’t pay taxes on it, but make sure you spend the full amount you contribute each year you.
Don’t get to keep leftover money in your FSA account at the end of the year, so plan ahead and make sure you get the most out of your dollars.
Now that you’ve learned about all three health care spending account options we hope you’ll take advantage if you can.
You want to get serious about planning and saving for your future health care expenses, planning ahead and making the most of your tax-free money, can ultimately help you stretch your healthcare dollars even further.
CHOOSING THE RIGHT HEALTH PLAN
When it comes time to choose a health insurance plan, there are many important factors to consider.
Some of the factors include the plan’s cost, the plan’s provider network, the plan’s prescription drug benefits and any specific services you require.
First, let’s take a look at cost.
You really need to know the full cost of a health insurance plan.
This includes the premium, the deductibles, co-payments and coinsurance, and these can add up.
A premium is the money paid for your health insurance.
It’s usually paid monthly, by you.
A deductible is the out-of-pocket amount you need to pay health care providers before your health insurance starts helping to pay for covered health care.
Deductibles vary from plan to plan.
A co-payment, also called a co-pay, is a fixed amount, say, fifteen dollars, you pay for covered health care services or medications, usually at the time you receive them.
Co-pays may be different for different types of medical treatments and services.
Co-insurance is your share of costs of a covered medical service which you are responsible for.
For example, if an X-ray cost $100 and you have 20% co-insurance, then your insurance company would only have to pay $80 or 80%, and you would have to pay $20 or 20%.
A policy will also have an “out-of-pocket maximum amount” or “out-of-pocket limit” to what you pay for the year.
This limit includes your deductibles, co-insurance, co-payments, and similar charges.
Once you have paid up to the limit, you are not required to pay any more costs for your covered health services for the rest of the insurance plan year.
Next, look closely at a plan’s provider network, because it will tell you which health care providers and types of care you will have access to under that health insurance policy.
Health Maintenance Organizations, Exclusive Provider Organizations, Preferred Provider Organizations, and Point-of-Service plans are all various ways health insurance plans can be implemented.
Some types of plans limit your choice of providers, and may not pay for providers that are not included in your network.
You should look to see if the plan you’re considering requires a pre-authorization, or approval, before you can see a chosen doctor or hospital.
Prescription drug benefits can be an important part of any health plan.
Review each plan’s formulary, or list of covered drugs, closely to determine which drugs are and aren’t covered.
Some plans may require you to use specific pharmacies.
And while all plans on the Health Insurance Marketplace provide these ten essential Health Benefits most people need, other services may or may not be covered.
To determine whether a specific service is included, check on the Health Insurance Marketplace or contact the insurance provider directly to review a Summary of Benefits and Coverage or Schedule of Benefits.
When you weigh each plan against your needs, you’re more likely to find the best plan for you and your family.
For more information go to www.healthcare.gov.
HOW TO PICK THE RIGHT HEALTH INSURANCE PLAN
Now, let’s talk about health insurance and its costs.
Health insurance in this country can be confusing and expensive, but you need it.
I’m gonna throw a number at you such as $68.900.
Big money, right?
But tell, me would you guess that this is the total cost of the surgery for a torn ACL, or is it the sticker price of a BMW 550i.
Have you guessed the Beemer?
But if you guess the surgery – you’re right!
That Beemer is gonna cost you about $3.000 less.
I guess you can save some money on the Beemer with other options, but when it comes to your knee you have two options: knee or no knee.
Now if you have insurance and you need that surgery, you’re covered.
You only have to pay a small portion of the sixty eight thousand, and maybe you can start saving money for that Beemer, with the money that you’re saving because of your health insurance.
If you think all insurance is expensive – think again.
There are a lot of options in insurance marketplace.
Generally health care plans are divided up by metals: Bronze, Silver, Gold, and Platinum.
Basically, the “blingier” the metal – the more you’ll have to pay for your premium. But the less you’ll pay for your copay or deductible and your out-of-pocket maximum.
Did I lose you?
Okay, let’s define some of these terms.
A premium is a fixed amount usually monthly that you’re responsible for whether you use any medical services.
In return your insurer will cover a portion of your cost if you or someone your plan needs medical attention.
Yet, keep in mind the insurer will still expect you to cover some of these expenses with your money.
A deductible is the amount you pay out of your own pocket before the insurance company covers any expenses.
Here’s how it works.
You end up at the ER getting stitches after coming home and decide you need to eat an avocado, and slice your hand in the process.
If the care you’ve got costs $1,500, then you have to cover that cost, because it’s less than your deductible.
But if you’re in the hospital and have $15,000 in surgery bills, you have to pay your deductible and your insurer will pick up the excess thirteen grand – your copay.
CO-PAYMENT OR COPAY
A co-payment or copay is a flat fee that you have to pay, even after your deductibles, for specific services like prescriptions or doctor’s appointments.
So, knowing all this, how do you decide on the right plan for you?
From a cost-benefit perspective, ideally you want your annual healthcare cost to be well above or well below your deductible.
If you have $3,000 deductible but never spend more than $2,000 a year on medical services, you could probably get away with a higher decibel and lower premium.
But, if something catastrophic does happen, you’re on the hook for that amount, so it’s a risk.
If you have that same $2,000 deductible but regularly spend more than $4,000 a year on doctors and prescriptions, you’re probably better off choosing a lower deductible and higher premium plan upfront knowing that you won’t have to pay that $3,000 later.
And if you’re planning on having a baby, or think you’ll need to deal with those health issues you’ve been putting off, it makes sense to plan ahead and pay for something more comprehensive.
It will save money for you and your family as those bills add up.
HOW TO NOT GET SCAMMED WHEN BUYING HEALTH INSURANCE
Do you know how to not get scammed when buying your health insurance?
Let’s talk about your health insurance, and what is real, and what is not.
If you walk away from buying a health insurance policy, and you’re not quite sure what you just bought, chances are you might want to take another look.
So, real quick, I’ve been selling health insurance for over 7 years and that has covered a time period between pre- and post-Obama care insurance.
The one thing that has remained constant throughout the entire time is these “fly-by-night indemnity policies” that people try and pawn off on you as legitimate health insurance.
It’s kind of sad because I’ve really lost count of the number of people who I’ve had to actually tell that they don’t have real credible coverage policy that follows the mandates of the new Affordable Care Act law.
This, as you would imagine, would come as a little bit of a surprise.
So, because I don’t want to have to keep telling you that, and hopefully I can avoid it from even happening in the first place, that’s our main goal today.
The first thing that you need to look out for is somebody telling you that they have a “zero deductible plan”.
This is definitely the biggest “red flag” that you can spot, and probably the first one your salesman will raise.
Zero dollar deductibles were almost impossible to come by in a pre-Obamacare world, and really to be honest with you, they only exist as an urban legend since 2014.
They just don’t exist anymore.
Technically the reason that they can say “you have a zero dollar deductible”, is because the plan doesn’t have a deductible at all.
Instead, it just pays set dollar amounts for specific services if you happen to need them
To be honest, it is one of the most dangerously misleading things an insurance agent can present to you.
If you had this “zero dollar deductible” plan and needed to be admitted to the hospital you’re probably in a little bit of trouble.
This indemnity plan is only gonna pay a set dollar amount like $500 or $1.000 per day when you’re in the hospital.
It doesn’t matter if you ran up a total bill of $8.000, if you’re only there for 3 days, then only means you’re gonna get maybe $1.000 or $2.000 for that total visit.
Simple math means that six or seven thousand dollars of that is your responsibility.
The craziest part is that this is probably one of the mildest examples I could give to you about that scenario.
If you found yourself “under the knife” for a more serious operation, like open-heart surgery or like serious cancer treatment, you probably would not even be able to believe the final bill.
The next thing that you want to look out for is if somebody tells you that you can apply for this plan at any time.
One of the fun treats Obamacare created was a “health insurance buying season” or which is more technically known as “open enrollment”.
This happens to be the only time of the year that you can actually purchase or make changes to your health insurance policy.
Traditionally, it lasts for about three months it has for the last couple years started on November 1st and run through January 31st of the following year.
If you are looking to my health insurance outside of this time period, without a special enrollment, then you’re gonna have to wait until next year.
Again, these questionable indemnity plans can be sold any time of the year because, like I said, they are not credible coverage as defined by the law.
Not saying this is a 100%, but if you filled something out online and your phone won’t stop ringing chances are you’re on your way to buying something that isn’t going to be great for you.
During your moment of desperation you might have filled out a couple forms online that promised you we’re going to get a free quote if you completed the information.
Then possibly within a matter seconds your phone started ringing and it probably hasn’t stopped since.
What happened was is that form was part of a lead provider service who takes your information and sells it to 7 or 8 agents at once.
And then they do it over, and over, and over again.
If you want to see the darkest places of humanity, beat 8 or 9 health insurance agent to call somebody within a matter of two minutes.
Your phone number is that agents only plan on how to sell you that policy.
So, they’re gonna keep calling until they can’t call anymore.
The sad part, is if they do get you on the phone, they are probably willing to blur a bunch of lines to try and close that sale.
And next my personal favorite is “you have to buy something before the end of the phone call, or you’re no longer MAGICALLY allowed to buy insurance ever again…”.
Again, this is one of my favorite lines that I have had people tell me, and it is a borderline illegal thing to do like.
You’re gonna have defined periods of time to purchase insurance, but in a 5 to 10 minute phone conversation.
CHRISTIAN PEER TO PEER PLANS
So, what about those “Christian peer to peer plans” you’ve heard maybe?
Well, this one’s a little trickier and calling it a scam is a bit of a stretch, but I feel it leaves you in a pretty dangerous spot if something bad happens, so I think it deserves to be on the list.
Basically, these plans remind a bunch of people who want to get together and play “health insurance company”, and hope that they have collected enough money from everyone to pay for stuff when things go wrong.
They operate outside of industry regulations, which is a little scary, and don’t have to mean any solvency requirements other insurance companies do.
Solvency is just a fancy word of saying “having enough money guaranteed on hand to make sure that they get to pay for the things that you’ll happen when you’re sick”.
Even those “fly-by-night indemnity companies”, are backed by those same solvency and federal regulations.
So, even from that standpoint you’re kind of better to be there, because the biggest problem is you want to make sure that money is there to pay for the thing that you need it to be paid for.
I mean, can you imagine getting handed an IOU from your health insurance company?
Probably not gonna work out well for you.
Of course, if nothing happens, then you’ll probably think that’s the best deal you’ve ever encountered in your entire life.
But, if something does and there’s no money to pay for that operation, well then it’s probably coming out of your pockets.
Well here’s a better, but not great option for you.
If you do need to buy some type of health insurance off-cycle from open enrollment, the one plan that you would probably want to look to first is going to be called a “short-term policy”.
These look and smell a lot more like a real health insurance policy than any of that things we’ve talked about before.
They have what’s called an “out-of-pocket limit” or “maximum”, basically meaning “when you stop paying”.
That’s the most important thing and that’s the easiest way for you to identify if something is real health insurance or not.
And again, at the end of the day that’s your health insurance company’s primary job of getting to a point that allows you to stop paying and for them to pick up the rest of the covered services.
A short term plan though is still not considered credible coverage however, and like an indemnity plan, you would also be subject to paying the individual tax penalty at the end of the year for not having health insurance.
SO, WHAT’S THE BOTTOM LINE?
Well the end of the day you should always know exactly what you’re buying when it comes to your health insurance policy.
If you’re ever unsure of a policy someone is trying to sell you, there’s really three questions that you can ask them to kind of put it through its test.
- How much is the deductible? (remember, deductibles aren’t a thing anymore),
- When do you stop paying? (or your “out-of-pocket maximum”),
- When can you buy the plan?
If you get the right answers to all 3 of those questions, then there’s a pretty good chance you’re on the right track.
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