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How to Choose a Health Plan in 5 Steps

How to Choose a Health Plan in 5 Steps

Here is a five step guide to finding the right insurance for your needs:

Choosing the right health insurance is one of the most important decisions that you will make. Not only does the plan you purchase affect how much you pay on a monthly basis, it also has a major impact on what sorts of treatments are covered in the event of a crisis. It is important to be proactive about choosing the right plan - by the time you are facing an emergency, it is already too late.

Here is a five step guide to finding the right insurance for your needs:

1. Identify your marketplace

While most people get insurance through their jobs, there are a number of other ways to purchase it as well, known as marketplaces. Generally, if you have the option of receiving coverage through work, it makes sense to do so - employers tend to contribute to the premiums, making this option considerably more cost-effective, but even if you are covered through an employer plan it is wise to research by shopping around to learn more about your options.

There are marketplaces for those who can't get coverage through work. One option is to purchase insurance through a private exchange. This way quotes and plans can be seen side-by-side and helpful experts can guide in decision making. There is also always the federal exchange, which also allows you to compare plans and premiums.

2. Outline what is important to you

Any time you make a major purchase, it helps to know what you are looking for going into the process. After you have decided which marketplace is right for you, sit down and make a list of the things you need, using your history as a guideline. Over the past few years, have you hit your deductible? What is the maximum out-of-pocket payment you would be able to afford in a pinch? What is your current financial situation? What services are you most likely to need coverage for?

Knowing the answers to these questions can help provide you with a roadmap for choosing a new plan. Creating a list of specific needs and questions is a way to give you more focus when searching online or speaking with an agent. An insurance agent can be a great resource when investigating a new policy, and having pertinent information and questions in front of you only aids these efforts.

3. Figure out which coverage has the benefits you need

After choosing all the things that are important for you to have covered, you can go through the list of available plans and see which ones meet your criteria. Each plan is different - some may have more thorough mental health services, while others are better in the event of sudden health emergency. It might not always be immediately apparent whether a particular insurer will fit your needs, so don't hesitate to write out a list of questions and call a customer service representative directly. The outline you created in step two can serve as a handy guide for this process.

4. Compare the different coverage networks

A plan that seems good at first might not be right for you, based on the network of doctors available. By contracting with a number of physicians, insurers are able to lower the cost of office or hospital visits - the more extensive the network, the greater number of doctors you will be able to see. If you are in a relatively remote area, or have a physician that you would like to keep seeing, check to make sure that the network you are choosing will serve your needs. Sometimes larger networks actually have more expensive policies to justify broader services. A more limited plan may be an opportunity to save money while also keeping you and your family covered.

5. Compare out-of-pocket costs

Once you have a list of plans that fit all of your criteria, you can start to compare out-of-pocket costs. Some plans pay a higher portion per visit, but have higher monthly premiums. Others have more affordable payments each month, but are more expensive each time you see a doctor. Generally, the lower your premium, the more you pay out of pocket.

Which end of the scale you tip toward depends on your background. If you are relatively healthy, see a doctor rarely and can't afford high premiums, go with a plan that costs more per visit but is cheaper on a monthly basis. Make the opposite decision if you frequently need care, are planning on having a child soon or regularly take expensive medications. There is no one-size-fits-all approach to choosing a plan, so the more details you can incorporate into your choice, the better your coverage will fit your needs.

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