I’m no health insurance expert, and to be honest, I sometimes feel like the amount of information to consider when evaluating an insurance policy is far too overwhelming for someone who isn’t fluent in this language. I’d like to become more versed in it, but with so little time on my hands and so much of it really needed to fully comprehend the nuances here, I’m wondering if you can help me just sort through the clutter and identity — what is the MOST important characteristic I should be considering when evaluating new health plans?
In Need of Expert Simplification
I often hear the question, “what should I be looking for in a health plan?” and, to be honest, the answer probably varies from broker to broker. But, I’ll give you my opinion; it’s one that’s gotten me by these past 35 years that I’ve been in the industry.
I’ve always focused my attention to the Out-of-Pocket Maximum. This is the amount that, once reached, your health plan then pays 100% of your covered health expenses for the balance of the calendar year.
The Out-of-Pocket Maximum is your protection against extraordinary losses caused by high health care claims. Once you’ve met the Out-of-Pocket Maximum, the only health care expense you will have for the rest of the year is paying your monthly premiums.
Occasionally you will have other healthcare expenses if you use Out-of-Network providers or elect to have procedures that are not medically necessary or covered by your plan. A good example of services not medically necessary is certain cosmetic procedures.
The Out-of-Pocket Maximum, deductible, and office visit copays for primary care and specialists are all set forth in the Summary of Benefits and Coverage, or SBC. The SBC shows you how much you pay and how much the insurance company will pay.
With the contemporary designs of most ACA compliant plans, the other key characteristic to consider would be the deductibles. These typically go hand-in-hand with Out-of-Pocket Maximums. The higher the Out-of-Pocket Maximum, the lower your premiums should be.
So, the next time you’re preparing for Open Enrollment and your broker is shopping the market for you, look at some variations in the Out-of-Pocket Maximums to gain an appreciation for how much difference lower maximums make in your premiums.
And remember: Deductibles, office visit copays, coinsurance and other copays like Emergency and Urgent care all count towards the Out-of-Pocket Maximum.