10 Questions To Help You Pick The Right Health Insurance Plan

We get it, figuring out which health insurance plan is best for you can be a daunting task. These 10 questions can help you understand which plan makes the most sense for your situation.

Before we start, a few quick definitions. Health insurance plans are often categorized based on how high their annual deductibles are (a deductible is the amount you’re responsible for paying before your insurance will start contributing). Plans with lower deductibles and higher premiums (the recurring cost you pay for insurance regardless of whether you used it during your plan year) are known as traditional plans. On the other hand, plans with higher deductibles and generally lower premiums are known as high deductible health plans (HDHPs).

Both traditional plans and HDHPs can also be split into types based on who you can receive medical service from and whether you use a primary care physician. The two most common types of health insurance are known as HMO and PPO coverage (read more about HMO and PPO coverage here). However, you can also get POS or EPO coverage if you’d like; these plans have elements of both HMO and PPO coverage.

When choosing health insurance, you should decide what type of plan you’d like (HMO, PPO, etc.), as well as whether you want a traditional plan or an HDHP. The questions below will guide you through both decisions and show you exactly what plan is right for you.

Do I want HMO or PPO coverage?

  • 1. How often do I travel?

HMO coverage is generally restricted to a network of medical providers. If you’re a frequent traveler who’s often outside your home region, PPO coverage could be a better fit. However, if you mostly stay around a particular city or region, HMO coverage is likely the better choice.

  • 2. Do I mind using a primary care physician (PCP)?

If you don’t mind seeing your PCP first for your medical service (who can then refer you to a specialist), an HMO might be the way to go. If you’d rather have the convenience of seeing specialists directly with a referral, a PPO might be what you want.

  • 3. Do I mind filing claims for medical care?

If filing claims is a major headache you want to avoid, an HMO plan will minimize them by keeping you in-network for your service. If you don’t mind filing claims for out-of-network services, a PPO will give you more options for medical care.

  • 4. How important is it to me to have lower premiums?

HMOs typically have lower premiums that PPOs. If that’s a deciding factor for you, an HMO plan might be the way to go.

  • 5. Do I have children covered by my health insurance who don’t live near me?

If your out-of-state kids are still on your health insurance, you’ll likely want a PPO, since they generally have a larger network.

  • 6. How much of a priority is it for me to have specialized care?

If you have a medical condition (or are at a higher risk for one) that requires specialized care, a PPO might be the better choice, since it gives you access to a larger pool of providers. If not, an HMO could be better.

Do I want a traditional plan or an HDHP?

  • 1. How often do I see the doctor or use prescriptions?

If you’re generally healthy and don’t see the doctor much, an HDHP will likely save you money with its lower premiums. However, if you’re a frequent user of medical services, you might want to choose a traditional plan, since HDHPs typically don’t have copays or coinsurance until you reach your deductible.

  • 2. How important is it to me to always have fixed medical fees?

If you enjoy the peace of mind that comes with knowing you’ll pay a $40 copay for a doctor’s visit, a traditional plan might be best for you. However, you’ll pay more in premiums for the privilege of having those fixed out-of-pocket fees. If you want to save money on your premiums and don’t mind paying more for the medical services you use, an HDHP might be the better fit.

  • 3. Do I mind shopping for deals on medical services?

With an HDHP, you have an extra incentive to price-shop for medical services, since you’ll often be paying out-of-pocket. If you don’t mind browsing for deals on your medical services (here are some great resources), you can save on medical costs and keep more of your money. If you don’t want to shop, having a traditional plan will give you a consistent price on many medical costs.

  • 4. How important is putting money away for retirement medical expenses to me?

The average couple retiring at 65 this year will have up to $400,000 of medical expenses that aren’t covered by Medicare. If saving for these expenses is important to you, many HDHPs offer participants the ability to enroll in health savings accounts (HSAs). HSAs allow accountholders to contribute tax-deductible funds, grow them tax-free, and use them tax-free for qualified medical expenses. This triple tax benefit makes HSAs the hands-down best choice for saving for medical costs.

If you think an HDHP is the best insurance choice for you, getting an HSA is a no-brainer if you’re eligible. Take this quick quiz to see if you’re eligible to make HSA contributions or learn more about HSA tax advantages.