Choosing a Medical Plan

Shopping for health insurance can be very intimidating. There are many factors to consider, from the cost of the monthly premium to the total out-of-pocket costs. It is important to shop carefully and compare all those potential costs before making a decision. Whether you shop on your own or choose a plan offered by your employer, choosing health insurance is one of the most critical decisions you can make.

Employer-Based vs. Individual

• In most cases, insurance offered through your employer will be less costly than insurance you buy on your own. For one thing, many employers pay a significant percentage of the cost of health insurance, with the employee picking up only a small amount. In addition, large employers are able to negotiate special group rates that individuals simply cannot. Even so, it is a good idea to shop and compare individual plans to what your employer is offering. This can give you a sense of what is out there and prepare you in case you plan to retire early and buy your own health insurance.

Monthly Premiums

• The cost of the monthly premium is one of the most important considerations when choosing a health plan. It does not matter how good the plan is if you cannot afford the premium. Review the plans you are offered carefully and compare the total costs, including the monthly premiums, out-of-pocket costs and deductibles.

Provider Network

• The provider network is an essential part of any health plan, since it determines everything from the doctors and specialists you can see to the hospitals you can go to. Most health insurers place their provider networks on the Internet, making it easy to search your area for doctors, hospitals, outpatient clinics and other health care providers.

Deductible

• Most health insurance plans require participants to meet a certain deductible before the plan starts paying for health care costs. These deductibles vary quite a bit, from the low hundreds to the high thousands of dollars. Check this deductible carefully and make sure it is something you can live with. Review the plan literature for exceptions to the deductible rule. Many plans pay for cancer screenings, annual checkups and vaccinations without a deductible.

Out-of-Pocket Costs

• It is important to look at not just the monthly premiums and the deductible but the total potential out-of-pocket costs as well. Many insurance plans require participants to pay a small co-payment, often 10 to 20 percent, for covered services. With medical costs on the rise, even a small co-payment percentage can really add up over the course of a year. Read your plan carefully to find the total out-of-pocket costs you face with each plan. A plan with a low out-of-pocket maximum could be the better buy, even if the monthly premiums are slightly more expensive.