How to Pick Suitable Medical Insurance

To an uninsured person, healthcare can be extremely expensive. Not only is it expensive, under the current ACA Law you could also be fined. By taking insurance, you may not be compensated to the full extent of your expenses, but you will get back a major portion, thus reducing costs to a manageable level. However, you should pick the right type of insurance for your needs. This requires a bit of research and here are a few tips to set you in the right direction.

Before selecting a plan know what it covers. All health plans will cover these services irrespective from whom you purchased the plan.

• All emergency services
• Hospitalization costs
• Requisite laboratory tests
• Maternal/Neonatal care
• Mental health treatment
• Substance abuse treatment
• Outpatient care
• Pediatric services
• Preventive health care services [immunization, inoculations, mammograms] • Management of long term chronic diseases such as BP, diabetes etc.
• Rehabilitation services

Most insurance plans cover the same set of benefits, though some of the older plans may not. You can request your employer to give you a ‘Summary of the benefits and coverage’. This will show you clearly what is covered and what is excluded.

Cost of the Plan

There are two costs associated with any insurance plan. The first is the monthly premium that you pay. The second is the amount you have to pay, after which the insurance company starts paying. Usually it is combination of deductibles, co-pays and co-insurance. The thumb rule is the higher your premium, the less you need to pay towards the expenses. In some states, if you purchase your plan through the state’s insurance marketplace, you may be eligible for an income-based subsidy on your premium and reimbursement of out-of-pocket expenses.

Types of Premiums

There are four types of premiums: Bronze, Silver, Gold and Platinum, shown in the increasing order of the cost of premium.

Bronze

Lowest premium but has the highest out-of-pocket expenses. It covers about 60% of the total cost of healthcare. The 2014 average for deductibles in this group is $5,081.

Silver

It has a higher premium and covers about 70% of costs. The out-of-pocket expenses are less with an average of $2,907.

Gold

This plan covers about 80% of the cost but has a higher premium and lesser out-of-pocket costs than Silver. The average out-of-pocket expenses work out to about $1,277.

Platinum

Under this premium, 90% of the costs are covered. They have the highest premiums but the lowest out-of-pocket expenses. The average deductible is $347.

You must select the appropriate plan depending on your state of health . If you have a known medical condition, it would be better to opt for a plan with a higher premium that covers more of your costs. If you are healthy, you may save money by opting for Bronze or Silver. However, be prepared for any medical emergency.

Some common insurance terminology

Deductible

This is your share of the expenses for the year and the insurance company will start paying its share only after this amount has been paid by you. Some plans do pay a portion of the costs even before your deductible has been fully paid. Check the fine print of the plan carefully.

Co-pay

This is a fixed amount you have to pay for certain medical services. For example a visit to the Physician may cost $100. Your share of $30 is the COPAY. The Insurance Company pays the balance $70.

Co-Insurance

This is the percentage of the medical expenses which are your liability. If the expenses are shared in the 20:80 ratio, a $1000 MRI will cost you $200. The higher the premium, the lower the cost to you.

Out-of-Pocket Limit

This is the maximum you will have to pay from your own pocket in a year. It is a combination of the deductible, co-pay and co-insurance as per your plan. This does not include premiums. Once this limit is crossed, the Insurance Company will pay 100% of all expenses thereafter for the rest of the year.

Different Insurance Companies have a different network of hospitals, doctors, labs etc. If a doctor is not listed in your plans, you may have to pay the entire bill or a larger share of it than usual. Therefore, if there is a specific doctor you wish to see for your treatment, ensure he/she is on the plan you purchase. By doing a bit of research, you can get the insurance plan most suited to your needs.