Understanding and reviewing health insurance plans can be complicated, so breaking it down into simplified concepts may improve the process and make you more comfortable with your decisions. There are many factors to consider, but starting with a blueprint can make the process less frustrating.
Here are the three things to consider when choosing your health insurance plan:
How the Plans are Divided
Individual health insurance plans on the Marketplace are divided into four different “metal” categories based on how you and the insurance company split the costs of your health care: Bronze, Silver, Gold, and Platinum. Please note: The metal level is NOT indicative of the quality of care you receive, only the cost breakdown.
Here is an overview of the cost division between the four plans from Healthcare.gov:
- Bronze plans. This metal category typically has the lowest monthly premium, but will have the highest cost when you need care or services. Bronze plan deductibles will be higher than the other metal plans and may be thousands of dollars a year on out-of-pocket expenses. Bronze plans are great plans for a healthy individual looking for a low-cost plan in case of the “worst-case” scenario. These plans provide low cost monthly premiums but you may have to pay for routine care yourself.
- Silver plans. This metal category typically provides moderate monthly premiums, and moderate costs when you would need care or services. Silver-level plans provide lower deductibles, but you can still expect to pay out-of-pocket costs before receiving care or services; however, those costs will just be at a lower yearly level. For those individuals that qualify for “cost-sharing reductions,” you must pick a Silver plan to get the extra discount or savings. Silver plans are ideal options for those who qualify for the “extra savings” or for people who want more coverage on routine care at a slightly higher premium amount.
- Gold plans. This metal category will have higher monthly premiums, but low costs when you receive care and services. Gold-level plans usually have lower deductibles, so more services are provided to members immediately, without having the out-of-pocket expense of the higher yearly deductible to meet. This may be the preferred choice for those who need more care and are willing to pay a higher monthly premium.
- Platinum plans.This metal category is the highest monthly premium, but provides the lowest cost for care. Deductibles are very low (sometimes at $0) so the plan will start paying its share of cost earlier than other plan categories. Platinum plans are good choices for those who may use or need substantial care and are willing to pay high monthly premiums.
Total Cost of Health Care
Next, you want to consider what the total cost of health care may look like, including your monthly premiumas well as:
- Deductibles: The amount you pay for covered health services before your insurance carrier will pay (excluding free preventative care).
- Copayments and coinsurance: The payments you make each time you get a medical service after reaching your deductible.
- Out-of-pocket maximum: The most you will pay for covered services per calendar year. When you reach that amount, the insurance company pays 100 percent for covered services.
After considering the metal levels and other costs associated with the plans, how do you choose the plan that would work best for you? Here is what to consider:
- If you don’t expect to use regular medical services or use prescriptions, you may want to consider a Bronze plan, with lower monthly premiums but a higher cost for services.
- If you qualify for “cost-sharing reductions” or don’t mind paying a higher premium, Silver plans may offer a good value.
- If you need frequent care and/or medications, you may want a Gold or Platinum plan. At this level, you can expect higher monthly premiums but your services will be paid for by the carrier.
Plan and Network Type
Lastly, you want to consider your plan and network type. Plan types refer to the amount of provider choices you may have available to you with a particular carrier. Some types of plans will restrict your provider choices while others will have a broader scope of available hospitals, doctors, and pharmacies. These types of plans include:
- Exclusive Provider Organization (EPO). A health insurance plan where services are only covered if you use doctors or hospitals in the provided network (except in an emergency).
- Health Maintenance Organization (HMO). A health insurance plan that will limit coverage to services from doctors who have a contract with the HMO. The plan will only cover in-network care except for in an emergency. An HMO generally requires you to live in its service area.
- Point of Service (POS). A health insurance plan where you pay less if you use providers and hospitals that belong to the plans network. These plans require a referral from your primary care doctor to see a specialist.
- Preferred Provider Organization (PPO). A health insurance plan where you pay less if you use hospitals and providers in the plan’s network, and you can use hospitals and providers outside the network without a referral for an additional cost.
While other factors (like quality ratings and understanding the deadlines) should be considered, separating the process of choosing a healthcare plan into these three categories can help you understand and compare the plans available to you. Simplifying the categories with a blue print for the can ensure a chosen plan is a good fit and give you confidence in your choice.