Making Sense of Your Health Insurance Plan

 

Health insurance is one of those things that makes Americans wince, and with good reason. Thanks to the Affordable Care Act, the vast majority of us now have some kind of health insurance (definitely a good thing), but that doesn't mean that we are any less confused about it. The fact is that our private health insurance industry has created a Rubik's Cube of deductibles, copays and coinsurance that leaves even the most sophisticated of us feeling frustrated. Whether you are getting coverage through your employer or going through one of the health care exchanges, start evaluating your plan by highlighting the numbers on these 9 key points:

What are your plan essentials?

1. Co-pays. If you have a qualified plan under their ACA, your plan will cover health basics like an annual check up and immunizations. But you may be responsible for a copay (usually between $10 and $20) for each visit;
2. Prescription Coverage. Check the prescription coverage, especially on any regular prescriptions you or someone in your household regularly takes, and note if there are co-pays. Note that currently, all ACA plans must pay for standard birth control methods;
3. Individual deductible. For anything not covered under those medical basics, the insurance company will require you to pay—up to a certain amount. Deductibles are running very high right now: employer plans average around $1200 but individual out-of-pocket deductibles can run higher;
4. Family deductible. If you think about it, those individual deductibles look even worse if more than one member of your family gets sick during the year. The household deductible tells you how much the family as a whole would pay in deductibles before the insurance company started to cover your costs;
5. Co-insurance. You would think that you'd be in the clear after paying all of those deductibles, but health insurance has one obstacle. Co-insurance means that you will continue to pay a percentage of your medical bills after you have paid your co-pay and your deductible. So someone with a  20% co-insurance provision who shelled out the full amount of her deductible would also pay 20% of the remaining medical costs up to the out-of-pocket limit;
6. Out-of-Pocket Maximum. There is some good news; there is a limit to how much you will have to pay in copays, deductibles and co-insurance. Your insurance plan will list the out-of-pocket limit (but beware— your plan might exclude copays from this number!). For 2015, the legal cap for an individual's out-of-pocket expenses is $6,600 and $13,200 for a household;
7. Health Provider Network. Your insurance plan has negotiated with a multitude of health care providers to pay lower fees in return for including the provider in the insurer's network. As the patient, you generally have to use the "in-network" providers or pay extra—and your out-of-pocket maximum won't help you in that case. Make sure you note who and where your network is;
8. "Hidden" Benefits. Check for discounts included in your plan on things like gym memberships, Lasik surgery or weight loss surgery, programs to quit smoking, newer birth control, durable medical equipment (like crutches and breast pumps), or alternative health care. These are probably not enough to sway your decision on choosing a policy, but you want to take advantage of them if you can;
9. Premiums. This is the number you see first, but they only make sense in light of what you've noted above. The premiums are what you will pay every month and are generally lower if you are paying more out-of-pocket.