If you have a family, shopping for health insurance can be a daunting task. You're not just finding something for your needs, you have to consider your partner and kids, too. How can you make sure your entire family is adequately covered, so that no one is left without the protection they need?
To make this process easier we’ve put together some helpful tips below:
Before you start shopping, do these 2 things.
- Jot down what you and your family needs.
Write a list that covers your family's specific health conditions, medications, and doctors. If there is a doctor you do not want to switch, mark that down.
Having a solid understanding of your family's healthcare needs before you start shopping for health insurance can save you a lot of time and money. Think of it like this - you wouldn't go car shopping without knowing if you needed a minivan, sports car or a fuel-efficient hybrid. Health insurance is no different.
Knowing your needs helps you avoid getting stuck with a plan that looks great on the outside but doesn't cover anything on your list. Better (for your health and wallet) is to anticipate your family's treatments, medications, and services and then to research how a particular health plan might cover them.
- Understand the health insurance lingo
Grasp the basics of deductibles, copayments, premiums and out-of-pocket maximums. Yes, all these words kind of sound like a foreign language, but don't worry, we'll translate for you. Here are the top 4 terms you should know before you start health insurance shopping:
This is the amount you have to reach before your health insurance takes over and starts paying. For instance, if your deductible is $2,000 you will need to spend that much before your health insurance plan covers your future costs. Plans with higher premiums tend to have lower deductibles and vice versa. This figure is important to know when considering your total out-of-pocket costs.
This is your ticket admission every time you visit a doctor, specialist, or have a medical test done. Co-pays do not go toward your deductible payment.
This is your monthly subscription fee for the health insurance. You pay this amount each month to your health insurance company, whether you're using their services (going to the doctor) or not. Since preventative care is 100% covered (meaning there is no co-pay) you might as well book that annual visit or mammogram.
- Out-of-Pocket Maximum (OPM)
Imagine going shopping with a budget, but you end up buying that extra "thing" that wasn't part of the plan. (We've all been to Target, right?) That's your out-of-pocket maximum cost – the additional amount you have to pay for health care services beyond your regular premiums. It’s essentially what's left after your insurance has paid its share and includes your deductibles, co-insurance, and co-payments for in-network health care.
3 Shopping tips while you're shopping
- Check the in-network providers but don't trust the directory!
Do you (or one of your family members) have a favorite doctor? Make sure that the doctor is in-network with the insurance plan you choose. This will take a little more work than simply visiting the health insurance carrier's website. Health insurance companies are known for their outdated provider directories. Best to call your doctor and check with the staff to make sure that they accept the plan you're interested in. Do this after you purchased a plan, and you may suffer a terrible surprise, and unexpected break up.
Why should you care if your favorite doctors are in-network? In-network doctors have an agreement with your insurance provider, so they can offer services at a lower rate, saving you money. Out-of-network doctors will cost you more and often a lot more.
- Don't forget the formulary and your prescription medicines.
Imagine going to the pharmacy to pick up your medicine and being given a bill larger than your grocery expenses. Scary, right? Some plans might cover the cost of your prescription drugs partially, while others might not cover them at all. For those medicines that you take on a regular basis, this is an easy way to get a full picture on you out-of-pocket costs.
But how do you uncover the cost? Your insurance provider's drug formulary! The word sounds like a fancy French something, but it's actually a list that your insurance plan uses to pick and choose which medications they'll cover. The formulary has tiers which determine the cost of the medicines. The lower the tier, the lower the cost. If your medication is on a higher tier or worse, not on the list at all, you might need to cough up more cash.
- Add it all up.
It's time to dust off that old calculator and get crunching some numbers. Why, you ask? Well, the cheapest plan might not always be the most cost-efficient and vice versa.
You see, every health insurance plan comes with its own set of costs. There's the premium, which is kind of like a subscription fee that you pay monthly to keep your insurance active. And then there's the deductible, which is the amount you have to pay out-of-pocket for your medical services before your insurance starts to cover the costs.
When choosing a health plan, it's essential to estimate these costs based on your family's healthcare needs. If you or your family members visit the doctor frequently or take regular medications, a plan with a higher premium but lower deductible could end up saving you money in the long run. On the other hand, if you're all as healthy as a horse and rarely see the inside of a doctor's office, a plan with a lower premium might be the more economical one.
To get a better idea of how much your health care might cost in a year, you can use the following equation:
(Monthly Premiums x 12) + Deductible + Out-of-pocket expenses (i.e. co-pays)*
*Not sure? Consider looking at last year's out-of-pocket costs to get a general idea for what this year might look like.
Now that you have the costs, make sure to include the pre-tax funds you receive from your employer for your health insurance premiums. Your StretchDollar health benefit will go a long way in stretching your family's healthcare budget.
A little (health insurance) planning goes a long way
Shopping for health insurance for your family is a bit like playing detective. It's a game of clues, calculations, and patience. You don’t want to be surprised after-the-fact. Armed with these tips, you're ready to hit a home run in your search for the right health plan for your family. Happy hunting.