How to choose a health plan

While most plans have many of the same features, there are differences you should be aware of.

Premiums. This is the amount you pay for health insurance. You might pay it monthly, quarterly, or once a year. You have to pay it no matter what services you use. Your employer will collect your premiums from your paycheck. You might pay them directly yourself.

Out-of-pocket costs. These include copayments (copays), deductibles, and co-insurance. These are costs you pay out-of-pocket for certain services. Your health plan pays the rest. You may have to pay a certain amount out of pocket before your health plan will start to pay for the cost of your care. This is called the deductible and it resets each year. Some health plans have a yearly out-of-pocket maximum cost that limits what you may have to pay in a year.

Benefits. These are the health services covered by the plan. Thanks to the Affordable Care Act, most plans must now cover the same basic services. This includes preventive care, hospital care, maternity care, mental health care, lab tests, and prescription medicines. Some services like chiropractic, dental, or vision care may not be fully covered. Also, some plans cover only certain prescription medicines, or charge different copays.

Provider network. Many plans have a provider network. These providers have contracts with the plan. They provide services for a set price. Your out-of-pocket costs are usually lower when you use network providers.

Freedom of choice. Some plans give you the freedom to make appointments with specialist providers. With other plans, you need to get a referral from your primary care provider (PCP) to see a specialist. Many plans also give you the choice to use out-of-network providers, but at a higher cost. Keep in mind that premiums and out-of-pocket costs also may be higher in plans that allow you to see out-of-network providers.

Paperwork. For some plans, you may need to file claims. If you have a medical savings account for out-of-pocket costs, you may need to keep track of your balance. You also may need to do some paperwork for tax purposes.

Employers and government sites, such as the HealthCare.gov, provide information for each plan. You may be given a booklet that compares all of your choices. You may also be able to compare plans online. When reviewing each plan:

• Add up the cost of premiums for the year.
• Think about how many services you and your family may use in a year. Add up what your out-of-pocket costs may be for each service. Check the maximum amount you have to pay for each plan. You may never reach the maximum if you use fewer services.
• Check if your providers and hospitals are in the plan network. If not, see how much more you need to pay to see an out-of-network provider. Also find out if you need referrals.
• Check to see if you will be covered for special services you might need, such as dental or vision care. Make sure any prescription medicines are covered by your plan.
• Add your premium, your out-of-pocket costs, cost for prescriptions, and any extra costs to get a total for the year.
• See how much paperwork and self-management comes with your plan. Think about how much time and interest you have in managing these tasks.
• Find out if there are special discounts to your local gym or weight loss program, or other health programs that you might like to use.

Taking the time to go over your options and compare costs are well worth it to make sure you get a health plan that suits your needs and your wallet.

Healthcare.gov website. Welcome to plan finder. finder.healthcare.gov. Accessed October 11, 2024.

Healthcare.gov website. How to pick a health insurance plan: 3 things to know before you pick a health insurance plan. www.healthcare.gov/choose-a-plan. Accessed October 11, 2024.

Healthcare.gov website. Understanding health insurance costs makes for better decisions. www.healthcare.gov/blog/understanding-health-care-costs/. Accessed October 11, 2024.

Updated by: Jacob Berman, MD, MPH, Clinical Assistant Professor of Medicine, Division of General Internal Medicine, University of Washington School of Medicine, Seattle, WA. Also reviewed by David C. Dugdale, MD, Medical Director, Brenda Conaway, Editorial Director, and the A.D.A.M. Editorial team.