Health insurance shopping 101: how to navigate open enrollment

Health insurance shopping can be a trip. Finding a plan with reasonable premiums and comprehensive coverage is a tall order. That said, there are ways to streamline your search before you even start. We’ve put together a comprehensive guide to help you with health insurance shopping as we approach open enrollment for 2020 plans. Grab a pen and paper and let us health you map out a plan of attack.

Health insurance shopping: step-by-step

With open enrollment quickly approaching, it’s a good time to get organized in your search for great health care coverage. To help you, we’ve broken down several key areas that you should be thinking about as you browse coverage options:

Types of health insurance
True Costs
Other Health Insurance Shopping Considerations

Open enrollment doesn’t have to be an overwhelming experience (and shouldn’t be). Consider the following information as you (and your family) begin hunting for the best health insurance for your needs.

Types of Health Insurance

The first thing to think about when shopping for health insurance is which type of plan may be best for you. As a self employed individual, you have several options:

HMO (Health Maintenance Organization)HMOs are one of the most cost-effective options, though there can be drawbacks as well. With an HMO, you have access to doctors and hospitals within the organization’s network. So if you have a trusted internist or specialist that you like to see and they are not in-network, this may not be the best option. HMO’s also require members to choose a primary care physician (PCP) and require referrals from that physician prior to seeing a specialist. This can sometimes delay care. Finally, there may be additional restrictions under HMO plans that can limit the number of doctor visits, tests, and other treatments.

PPO (Preferred Provider Organization)PPOs are similar to HMOs in terms of how the plans function. There are copays, comprehensive coverage, in-network doctors and hospitals, etc. PPOs do not require a referral from a PCP, making it much easier to schedule appointments directly, as your health needs dictate. With many PPO plans, you may be able to see a doctor that is not in-network while still getting some coverage (up to 70%). While PPOs offer this added benefit, it comes with a price tag; these plans typically have much higher premiums than other options.

EPO (Exclusive Provider Organization)An EPO is a good middle-ground option between PPOs and HMOs, though it offers slightly more flexibility and tends to have a nationwide network (rather than just regional). EPOs tend to be less expensive than PPOs and they also offer the option to see a specialist without a referral. That said, they are similar to HMOs in that they do require members to pay out-of-pocket for care received from a doctor outside of the plan’s network.

POS (Point of Service)A POS plan is another hybrid option. Similar to an HMO, this type of plan requires a referral to see a specialist. While you also have the option to see an out-of-network physician, members pay less when using in-network providers. These plans tend to cover a lower level of costs associated with visiting a provider that is not in-network.

Catastrophic/High Deductible Net PlanThese plans are a popular choice for the self employed population who is not keen on paying the high prices associated with many other plans, especially the young and healthy who don’t anticipate needing to see a doctor on a regular basis. These plans—as the name implies—have high deductibles, but cover 100% of costs after the deductible is met. This type of plan can come in handy if something major comes up (you get hit by a car, face a serious diagnosis); however, the mega-high deductibles mean members have to pay for doctor visits and any other routine care costs that arise prior to meeting the deductible.

True Costs

It’s easy to focus on one or two cost elements of a particular health care plan when shopping for health insurance; however, it’s probably more beneficial to take several things into account to figure out how to get coverage without breaking the bank. Deductibles, coinsurance, copayments, and premiums can all impact the total amount the member may be responsible, so each deserve a little attention.

Coinsurance – If you choose a PPO, this is a term to pay attention to. Coinsurance is the total amount of covered health care services that a member is responsible for after the deductible is met. For example: If you have a plan that offers 20% coinsurance, you’ll be responsible for paying 20% of the costs after you meet your deductible.

Copay – This is the shortened version of “co-payment.” Almost every type of insurance plan listed above requires members to pay a co-pay when seeing a doctor. These can range from $10-$50 and can sometimes be applied to the deductible.

Deductible – The deductible is the amount a member must pay for covered health care services before coverage kicks in. Per the plan guidance above, the amount of the deductible varies widely and may fall anywhere between several hundred to several thousands of dollars annually. The deductible resets to zero at the beginning of the calendar year.

EOB Form (Explanation of Benefits Form)This is often one of the most confusing elements of health care. The EOB may look like a bill, but it is not. Instead, it outlines the details of a medical insurance claim that has been processed, including the amount the doctor charged the insurer, the amount that the insurer is paying the doctor, and what portion of the payment is your responsibility. The latter portion usually says something like “What you may owe”, though you don’t have to make a payment yet. Any portion that you may be responsible should be billed directly by your provider and any payment made should go directly to the provider. Sometimes the EOB is not accurate, which is also why it’s best to wait for a bill from your doctor.

Out-of-pocket maximum – This is the total amount a member is responsible for paying before the plan starts covering 100% on everything. This can easily get confused with the deductible, but they are two separate things. After you meet your deductible, you still have to pay coinsurance and co-pays until you meet the out-of-pocket maximum. After that point, your plan would cover 100% of all costs associated with care.Example: Let’s say your plan has a $1,000 deductible, 30% coinsurance and a $3,500 out-of-pocket maximum. If you are in a serious car accident and accrue hospital bills to the tune of $50,000, your responsibility may look like the following:

>>>If you haven’t paid anything toward your deductible yet:You will pay $1,000 to meet your deductible and then 30% of health costs on the remaining $49,000 up to your out-of-pocket maximum ($3,500). Your total payments to cover the accident would amount to $3,500.

>>>If you have already met the deductible:You will pay 30% of health costs on the remaining $49,000 up to your out-of-pocket maximum ($3,500). Your total payments to cover the accident would amount to $2,500.

>>>If you have no out-of-pocket maximum and have not met your deductible:You will pay $1,000 to meet your deductible and then 30% of health costs on the remaining $49,000 ($14,700). Your total payments to cover the accident would amount to $15,700.

Each of these factors can play a significant role in health insurance shopping, depending on your unique health care needs. In most cases, you should be able to make some highly educated guesses based on your current medical history and predictable health care costs.

Other Health Insurance Shopping Considerations

It’s impossible to say one health care plan is better than another for self employed people. You should take your own circumstances into consideration, including family needs. For help getting organized, take a look at our Health Insurance Shopping Checklist:

Self employed individuals looking for a Texas silver plan may want to consider Decent’s Trailblazer plan. This plan is customized for freelancers to be affordable, comprehensive, and easy-to-understand. Not only do you enjoy free primary care, but our plan also includes low or no copays for care before you’ve hit your deductible. You’ll always know before you go how much your doctor visit will cost.

For those looking for a higher-deductible, higher out-of-pocket plan that is less expensive overall, our Pathfinder bronze plan is simple and straightforward. It’s our most affordable option and a perfect fit for freelancers and other self-employed individuals shopping at the bronze plan level. Our mission is to keep people healthy and help them build relationships with their primary care doctors. Get the full scoop on our Pathfinder plan page.