Picking your health insurance plan for 2020 is an important decision you’ll be stuck with for the entire year. Which means it’s worth taking the time to do a little homework and make the pick that’s right for you.
Follow these seven steps to make sure your insurance plan fits your health needs and your budget.
1. Start With Your Health History
Make a list of how much you used your health insurance last year. The list needs to include physician office visits, prescriptions, diagnostic and lab work, and medical procedures.
2. Find Out What Plans Are Available To You
Identify the plans available to you, the amount of cov- erage they offer, and the amount of upfront dollars you will need to pay.
Use a chart like this to help you organize:
|Plan 1||Plan 2||Plan 3|
|Premium (cost per month)|
|Deductible (amount you pay before|
insurance kicks in)
|Out of pocket charges|
3. See How Each Plan Stacks Up Compared To Your Expected Medical Costs
Compare the costs of every health plan available to you. Don’t automatically exclude any, even those with a high deductible. Which plan costs you the least in total?
4. Find Out What Can You Afford Monthly
Can you handle your healthcare costs in one payment or, if not, how much you can afford monthly. For example, can your pocketbook sustain $694 in monthly costs, or $8,365 annually? Be realistic.
Tip: check out the Kaiser Foundation’s calculator for help with this.
5. See If Your Current Doctors And Hospitals Are In Network
If you go to an out-of-network provider, your copay, deductible, coinsurance, and out-of-pocket maximums will generally double. You’ll have to decide if that doctor/provider is worth it or be forced to find another doctor.
6. See What’s Covered
- Emergency services
- Outpatient care
- Mental health
- Prescription drugs
- Rehabilitation services
- Lab services
- Pediatric services
- Preventative services
7. List the tax deferred mechanisms of each plan
Ask for and study all tax deferring or saving mechanisms available like premium-only plans, flexible spending accounts, health reimbursement accounts, and health savings accounts. These plans all allow you to save and use your dollars before income tax is applied, kind of like a 401K. These options are no brainers when they’re available to you since they increase the amount of money you have to pay for your health expenses.
Remember, don’t overinsure by selecting the plan with the lowest out-of-pocket fea- tures, because it will have the highest premiums, which are non refundable. This checklist will give you a clear idea of the most cost-effective plan that meets your specific needs.
You only have one chance a year to make the best choice, so do your homework!