Choosing the right health insurance coverage is hard enough with employer plans, but at least questions can be addressed to somebody on staff who knows more than you do and won’t steer you to the most expensive plan. When you shop for coverage on your own, the choices are far more complicated. Most employers only offer one or two health plans as options. On the individual insurance market, you’re likely to face dozens. And you’re on your own.
Grappling with the details of so many different individual policies can lead to a strong urge to pick the next one that sounds halfway reasonable. But halfway isn’t good enough. Hang in there, keeping the following eight basics in mind to help cut through the fog of numbers and unfamiliar terms:
1. Your “must-haves.” You can’t foresee a sudden injury or illness, but you can anticipate some medical needs. Not all policies provide maternity coverage, for example, but it’s an obvious must-have if you’re starting a family.
2. The cost of the basics. Just as it doesn’t make sense to want a luxury car with a monthly payment you can’t afford, there’s not much point in thinking about a Cadillac insurance policy with a high monthly premium if your budget can’t handle it. It would be more practical, if you’re relatively young and healthy, to choose a policy with a high deductible—the total you must pay out of pocket, usually over $1,000 dollars, before benefits kick in. Your basic expenses also should take copays (the fixed fee for an office visit or medical test) and coinsurance (your share of the cost of prescriptions or hospitalizations) into account.
3. Provider networks. If you have a primary care physician and favorite specialists you like, be sure they participate in the plan’s network. Policies generally cover a lower share of the cost of out-of-network care—or not cover it at all.
4. Out-of-pocket maximums. With some plans, there is no limit on the amount you have to pay out of pocket over the year, no matter how high. Steer clear of plans without an annual cap. Even with such a ceiling, expenses will be covered only if the insurer considers them medically necessary. And with many plans, you may have to continue to make copayments.
5. Prescriptions. Any prescribed drugs you take regularly should be covered. The plan’s list of medications (the “formulary”) will show you.
6. Annual limits on coverage and services. Thanks to health reform, annual dollar limits on coverage will disappear by 2014, but for now, any individual policy you buy cannot have a limit lower than $750,000. Above that amount, you pay the full cost of care once coverage has been exhausted. There could be separate caps on specific benefits such as prescriptions, rehabilitation services, and doctor visits.
7. Dependents. If you have children under age 26 who don’t have health insurance from an employer, the law permits them to be on your insurance. Policies also can no longer exclude kids under age 19 from coverage because of pre-existing conditions.
8. Getting help. You can plow through individual health insurance policies available in your part of the state, with no need to supply your name, number, or other personal information, at Healthcare.gov, launched last summer by the federal government to give consumers a tool for finding and comparing policies. Basic information about buying health insurance also is on the website. If you need a live person to walk you though the messier details, theNational Association of Health Underwriters has names and contact information for licensed local agents and brokers.