Tips for Buying the Best Obamacare Health Insurance
It’s easy to feel overwhelmed when choosing an Obamacare health insurance plan because there are often many plans to choose from. You don’t want to be stuck in a plan that doesn’t fit your budget or needs for an entire year.
You may have received advice from friends or family based on their experiences, but you should keep in mind that there is no single plan that is best for everyone. It’s hard to tell which Obamacare plan is best for your personal needs because there are so many things to consider when buying health insurance: deductibles, coinsurance, copays, doctor networks, prescription coverage, and more.
This article will help you narrow down your choices to find a good match for your needs so that you can buy health insurance with confidence.
Understanding different types of health insurance plans
When buying health insurance, it’s helpful to understand the different types of health insurance plans available because they may affect the path you take when receiving health care. The choice between these types of plans may depend on your personal preference. These are some of the most common types of plans:
- HMOs – Health Maintenance Organization (HMO) plans tend to require you to pick a primary care physician who will be your first point of health care for most visits. This type of plan can work well for individuals or families that want to maintain an ongoing relationship with a doctor they know and trust. Under an HMO plan, you generally must get a referral from your primary care physician before seeing a specialist. Under an HMO plan, the list of in-network specialists may be narrower than with other types of health plans.
- PPOs – You have more freedom with PPO (Preferred Provider Organization) plans to see doctors and specialists without referrals. For example, if you are having problems with your tonsils, you could make an appointment with an ENT specialist without having to see a general practitioner first. You’ll want to find doctors within your plan’s network for the best insurance coverage. PPO plans may in some cases help pay for out-of-network doctors, but often at a higher cost to you.
- POSs- Point of Service (POS) plans combine elements of HMO and PPO plans. You may need to select a primary care physician, and they will then provide referrals to specialists when necessary.
- EPO Plans – Exclusive Provider Organization (EPO) health plans are similar to PPO plans, but will typically not cover any out-of-network costs. Their list of in-network doctors and hospitals is very specific.
Picking the best health insurance plan metal level for your budget
All Obamacare health insurance plans are assigned a ‘metal level’–bronze, silver, gold or platinum—which provides a short-hand guide to how much you can expect to pay toward your medical care. But, don’t confuse the names of the metal levels with Olympic medals! Depending on your medical needs and budget, a gold plan is not necessarily better than a bronze plan.
Typically, platinum or gold health insurance plans have higher monthly premiums than silver or bronze plans. The “perk” of platinum or gold plans is that you will have lower out-of-pocket costs when you actually receive medical care.
Metal levels are based on what the average consumer can expect to pay toward his or her covered medical care in one year. Here’s how it breaks down for all metal levels:
- Platinum: expect to pay 10% of costs for covered medical care on average
- Gold: 20% of costs for covered medical care
- Silver: 30% of costs for covered medical care
- Bronze: 40% of costs for covered medical care
There are also catastrophic plans with higher out-of-pocket rates, but they’re only available for people under the age of 30 or who meet hardship criteria.
Understand your health needs to pick the best health insurance plan for you
The biggest reason that buying health insurance is not a “one-size-fits-all” process is because everyone has different health needs and reasons to visit the doctor. If you visit the doctor often or have a chronic condition that requires attention, you’ll probably want to buy health insurance that has lower deductibles and copayments, and a lower out-of-pocket maximum. Remember, these types of Obamacare plans tend to have higher monthly premiums than plans with high deductibles.
Another element to consider when buying health insurance is whether or not there is a doctor you would like to keep seeing. Perhaps you or your children have visited the same doctor for years and have built a rapport. If this relationship is important to you, make sure your doctor is covered by any health insurance plan you consider buying, since provider networks can vary a lot by each insurance company or health plan. The online marketplace where you’re shopping may be able to advise you of the network status of your preferred doctor. You should ask both your doctor and your prospective insurance company directly, since in-network statuses can change at any time.
Make a list of any prescription drugs you take on a regular basis. Buying a health insurance plan to cover your prescription drugs can save you a lot of money, but you need to check if the specific drugs you use are covered before purchasing the plan. Consult the insurance plan’s drug formulary to see what prescriptions are covered. Make sure you can afford the deductible or copayments in addition to your monthly health insurance premium.
Some plans have separate prescription drug deductibles, which might make sense if it’s affordable and you rarely see the doctor for anything other than getting your prescription refilled. In this case, a plan with a lower monthly premium (such as a silver or bronze plan) might make more sense. Just make sure you can afford the deductible in case of a serious illness or hospitalization.
Do you typically only receive preventive medical care in a single year? If you’re buying health insurance and trying to calculate how much you’ll need to pay for doctor visit copayments, keep in mind that all Obamacare plans will cover a broad range of preventive care services at no out-of-pocket cost to you. This generally includes an annual checkup, women’s health checks, well-child visits, immunizations, and certain preventive screenings.
Understanding how to balance costs when picking the best health insurance plan
The most basic Obamacare costs that people are familiar with are the premium and the deductible. Premiums define what you must pay monthly to keep your coverage in effect and stay insured. Deductibles are a major factor in cost-sharing and only need to be paid when you actually receive covered medical care. Other kinds of cost-sharing include copayments and coinsurance.
Wouldn’t it be great if you could buy health insurance with a low premium and a low deductible? Unfortunately, this isn’t usually the way it works. In general, lower premium plans tend to come with higher annual deductibles. These plans make sense for people who don’t see a doctor often and aren’t taking prescription drugs. If you choose to buy a low premium health insurance plan, just be sure you can afford the deductible in an emergency.
Higher premium plans tend to have lower annual deductibles. If you have a chronic condition, go to the doctor regularly, or take expensive prescription drugs, it can actually be more economical to pay a higher monthly premium than to be responsible for reaching a high deductible before receiving your benefits.
The keys to picking the best health insurance plan
There is no single health insurance plan that’s best for everyone. The plan your neighbor, coworker, or cousin chose won’t necessarily meet your needs at a price that works for your budget.
To buy the health insurance plan that’s right for you, you should:
- Know the difference between plan types such as HMOs and PPOs
- Understand your personal coverage needs
- Find the right balance between premiums, deductibles, and other forms of cost-sharing that fits your budget and needs.