SELECTING A HEALTH INSURANCE PLAN
Choosing a health insurance plan can feel overwhelming. However, knowing what to look for before you start comparing options can simplify the process and lead you to a smarter, more cost-effective decision. Don’t just pick the plan with the lowest premium—dig deeper to understand what you’re really buying.
Know What the Metal Categories Are: Bronze, Silver, Gold, and Platinum
Health insurance plans are often divided into four “metal” categories: Bronze, Silver, Gold, and Platinum. These categories indicate how you and your insurance plan share costs. Bronze plans typically have the lowest monthly premiums but the highest out-of-pocket costs when you receive care. Platinum plans usually have the highest monthly premiums but the lowest out-of-pocket costs. Remember, the metal category reflects cost-sharing, not the quality of care you will receive.
Read The Plan Summary of Benefits and Coverage (SBC) That Comes With Each Plan
Your health plan clarity starts here. The Summary of Benefits and Coverage (SBC) is your essential guide to what your plan does and doesn’t cover. Think of it as your cheat sheet for quickly comparing costs, understanding key benefits, and choosing the perfect plan for your needs. CLICK HERE to look at an example of a SBC form.
Costs: Look Beyond The Monthly Premium
Your total healthcare cost includes more than just your monthly bill (the “premium”). To get a true picture, you must also consider out-of-pocket expenses you pay when you get care, including:
Deductible: The amount you must pay out-of-pocket for covered services before your insurance plan starts to pay.
Co-pay: A fixed amount you pay for a covered service, like a doctor’s visit or prescription.
Co-Insurance: Your share of the costs for a covered service, expressed as a percentage (e.g., you pay 20%, the plan pays 80%).
Annual Deductible: The deductible amount that resets each plan year.
Annual Out-of-Pocket Maximum: The most you will have to pay for covered services in a year. After you reach this limit, the plan pays 100% for covered services. This is a critical consumer protection.
Always think about both your monthly premium and potential out-of-pocket costs when shopping.
Know What Plan Types Mean: HMO, PPO, POS, and EPO
The type of plan you choose determines your flexibility in selecting healthcare providers.
HMO (Health Maintenance Organization): Requires you to use doctors and hospitals within the plan’s network and typically requires a referral from your primary care physician to see a specialist.
PPO (Preferred Provider Organization): Offers more flexibility. You pay less if you use providers within the plan’s network, but you can also use out-of-network providers for a higher cost.
EPO (Exclusive Provider Organization): Requires you to use only providers in the plan’s network (except in the case of an emergency).
POS (Point of Service): A hybrid plan where you need a referral to see a specialist, but you have some out-of-network coverage.
Your Healthcare Providers: Are They In The Network of The Plan You Want ?
One of the most critical factors is the provider network—the list of doctors, specialists, hospitals, and labs that have contracted with the insurance plan.
In-Network Providers: These providers have agreed to negotiated rates with your plan. Using them results in the lowest out-of-pocket costs for you.
Out-of-Network Providers: These providers do not have a contract with your plan. Using them can result in significantly higher costs, or your plan may not cover the services at all.
Actionable Step: Before enrolling, use the plan’s online Provider Directory or call the carrier directly. Do not assume! Verify that your Primary Care Doctor, key specialists, and preferred hospital are listed as in-network for the specific plan you are considering.
Make Sure Your Medications Are Covered & Knowing Their Tier by The Insurance Plan
If you take prescription drugs, understanding the plan’s “formulary” is essential. The formulary is the list of covered prescription drugs, organized into tiers that determine your cost. In New Mexico, a typical tier structure is:
Tier 1 (Lowest Cost): Preferred Generic drugs.
Tier 2 (Mid-Cost): Non-Preferred Generic and Preferred Brand-name drugs.
Tier 3 (Higher Cost): Non-Preferred Brand-name drugs.
Tier 4 (Highest Cost): Specialty drugs.
Formularies can vary significantly between plans. A drug covered in Tier 1 by one carrier might be in Tier 3—or not covered at all—by another.
Actionable Step: Check the potential plan’s online formulary and look up every medication you take. Confirm it’s covered and note its tier to accurately estimate your prescription costs.
Summing it All Up
Selecting the right health insurance is a significant decision that requires careful consideration. Don’t make a choice based solely on the monthly premium. Instead, take a holistic view: evaluate the plan type (HMO/PPO), ensure your doctors are in-network, verify your medications are covered affordably, and understand all potential costs, including your deductible and out-of-pocket maximum.
If this process feels complex, remember that you don’t have to navigate it alone. A licensed insurance broker from WorkForce411 can provide invaluable assistance. They can help you compare plans, clarify confusing terms, and ultimately choose a plan that best fits your unique health needs and budget.
By taking these steps, carefully reading the SBC, and seeking expert guidance, you can confidently choose a plan that provides the right balance of cost, coverage, and peace of mind for you and your family.
Call 888-871-4011 to speak with one of our Certified BeWell Brokers/Assisters or click here to book an appointment if you plan to buy a policy through BeWell. We will walk your through all the plans that look like they are the best fit for you.