Choosing the right plan isn’t always easy. There are many factors to consider and many of those factors are hypothetical. You may not have all the facts and you’ll have to make your decisions on instinct or play the odds. Here’s how to calculate the odds and make a decision with as many facts as you can:
Analyze the Doctors and Hospitals You Need to Access
Gather a list of the doctors and hospitals you want to have access to, and make note of their contact information.
Call each one to make sure they accept the insurance you are considering for the coming year. Many providers list the insurance plans they accept on their website. However, it may be best to just call them. Plans change and, under the current health insurance environment, it’s smart to double-check.
This will be a simple way to help you narrow your options, or insurance carriers, and is an important piece of the puzzle.
If you do not have special relationships with doctors or hospitals, look at where you may go in times of need. If you don’t care where you go, then make note of that too. It will open up your options considerably.
Calculate Your Cost Scenarios
Here, you can use a spreadsheet or just do it the old-fashioned way, with a calculator.
From your list of possible choices above, make columns for each. You will be listing fees and costs in each column.
For each option, list the monthly premium times 12, to get your total yearly total premium, average doctor visits for the year (times the copay) and any other fixed costs for that plan. You can also list any prescription copays you estimate.
Below that, list the possible financial risk under that plan.
You can list the out-of-pocket maximums here. The out-of-pocket maximum is the amount you could pay for an expensive injury or hospitalization.
It includes your deductible. If the plan doesn’t have an out-of-pocket maximum, just write “unlimited”.
Now, add up each column and put the totals at the bottom + the maximum. For plans with unlimited out-of-pocket maximums, put the known figure and a +plus sign, then write “unlimited” after it. Then total those.
For instance, column A has a $400/month premium and a $13,700 maximum family out of pocket. There are $5 copays and your family visits the doctor about 10 times a year. You’d list the total as $4,850 + $13,700. Your total possible financial risk is $18,550.
Let’s say column B has a premium of $600/month and a $6,000 maximum family out of pocket, with no copays.
Your totals would be $7,200 + $6,000 and a grand total of $13,200 possible
And column C has a premium of $250/month and a $2500 total family deductible with 80/20 after the deductible.
This one is a bit more tricky.
Your total yearly known costs are $3,000 + $2,500 with a grand total of $5,500. However, you are responsible for 20% of the costs above that as well.
So, while Option C sounds like a great deal, you may want to think about possible treatments needed, look at your family’s health, and judge if it’s a risk you can afford to take.
Generally, the more risk you bear, the cheaper your premiums will be.
Consider your age, activities, and overall health. Try to judge your likelihood of needing medical services.
Don’t forget some things that are a factor. Planning to have more kids, skydiving or other dangerous sports, travel plans and habits, overall health. Do you smoke, have heart conditions, etc. This will help you look at the possible family out-of-pocket more objectively.
If you think your healthcare needs are low, then you may opt for a plan with a cheaper premium and more risk born by you. However, if your possible need for healthcare is high, you may want to pay the extra premium to limit your possible financial exposure.