If you are worried about the rising costs of healthcare, then you aren’t alone. Four out of ten adults in the United States report having trouble paying health insurance deductibles, and nearly a third report problems paying their medical bills. With almost a quarter of Americans unable to afford healthcare, it’s time you learned what to look for when browsing for a new healthcare plan to ensure you get the best deal possible.
The insurance premium is how much you pay each month for healthcare. Many people get tax credit premiums if their income is between 100% and 400% of the poverty level, thanks to Obamacare. If President Trump replaces Obamacare with the American Health Care Act, then these credits are still available but will be calculated differently.
Remember that you get what you pay for with health insurance, as with most things in life. Insurance policies with less coverage also have smaller premiums, while the most comprehensive plans cost more. Don’t automatically invest in the cheapest option. A more expensive plan that covers everything you need can save you money in the long-term. For instance, a New York health insurance plan should probably cover a lot more than a health insurance plan in Utah and be respectively more expensive.
The deductible is how much you have to spend before the insurance company covers the rest. While you will typically have to cover all of the costs until you meet the deductible, some insurance providers cover certain things even if the deductible isn’t met. For example, you could get a free annual exam with your policy.
The lower the deductible, the higher the premium, and vice versa. If you don’t think you’ll need much coverage and can only afford a small premium, then you can consider “catastrophic insurance.” These plans have a low premium and high deductible that only comes into effect if something catastrophic – and expensive – happens.
Your insurer won’t necessarily cover care provided by any doctor you find. Insurance companies connect to care providers and create deals with them. The care provider accepts the insurer’s terms and conditions and joins their “network.”
Insurance providers generally only pay for care by doctors in this network. Most people continue to go to doctors within this network even when paying out of pocket. This means the money goes towards the deductible, and the caregiver has a lower rate for their care.
The size of this insurance network is essential, given that you’ll look for caregivers within the network. You might want to be covered by a leading cancer clinic or children’s hospital, for example. Insurers may offer small deductibles and premiums to compensate for having a small network. If you can’t get the care you need, then look for a different insurer.
You may find yourself in a situation you need out-of-network care. It would be best if you were looking for an insurance policy covering at least some of the costs of out-of-network coverage to avoid a huge bill. Some insurers will be more generous than others for this. Some will pay a small part of the total cost. Some won’t pay anything at all. Some will pay a portion of the cost for an emergency.
You should never assume that you won’t need out-of-network care. There are many cases of people going to hospitals in the network and receiving out of network care because a staff member wasn’t included in the network. Find coverage that offers some out-of-network coverage to protect against unexpected expenses.
The out-of-pocket maximum on a policy is how much you pay for covered services throughout a year. If you reach that point in deductibles, coinsurance, and co-pays, then your insurer covers all the costs for the rest of the year. Premium payments don’t account for the out-of-pocket maximum, but any healthcare service you are covered for will.
This maximum is not the same thing as your deductible. Even if you reach your deductible, you still have to pay for coinsurance and co-pays set by the policy. However, when you reach your out-of-pocket maximum, you shouldn’t have to pay anything else towards covered services.
Having a low maximum means you don’t need to worry as much about emergencies and surprise expenses. It also means you know the most you’ll have to pay and can budget around that cost. If you expect to need a lot of healthcare over a year, then a policy with a low out-of-pocket maximum is a smart choice.
Deciding between different healthcare plans ultimately comes down to choosing between a high monthly premium where you pay less for your care, or a lower monthly premium with the risk of paying more for healthcare. Consider your budget, ability to pay, and ability to secure money in an emergency when choosing between policies.