How to Choose Health Insurance: The Nurx Guide

There might be a chill in the air, but November and December have zero chill. On top of everything else you have going on around the holidays, it’s time to pick an insurance plan for next year. If you buy insurance on the individual market, you have only until December 15th, which is when open enrollment closes in most states. If you get your insurance through work, you’re probably in the middle of your open enrollment period right now as well. 

Whatever you do, don’t just pick a plan at random to be done with it. We get it that health insurance is about as interesting as tax law (the two things are related—more in a minute), but spending a little time researching the right plan for you could leave you healthier, with more money in your pocket, next year.

To make the process easier, we sat down with Jordan McIntosh, a licensed insurance broker from Stride, and put together a guide to help you find the right plan for your needs. Stride can help you choose the right plan for you if you are without employer-sponsored coverage and need help navigating the individual exchanges.

Decision #1: HMO, PPO, EPO, or POS

There are four basic types of health insurance plans. HMOs and PPOs are the big ones, and you may be able to choose from EPOs and POS plans too — we’ll explain.

HMO (Health Maintenance Organization)

• Usually the most affordable option
• Must use in-network providers
• You can only see a specialist if your primary care provider refers you 
• No coverage for out-of-network providers except in the case of emergency

PPO (Preferred Provider Organization)

• Usually more expensive
• You don’t need a primary care doctor or a referral to see specialists
• Out-of-network providers are covered (but you’ll pay more if you choose them)

EPO (Exclusive Provider Organization)

• Like a hybrid HMO and PPO
• You don’t need a referral to see in-network specialists, but . . 
• No coverage for out-of-network care

POS (Point of Service)

• Like a hybrid of an HMO and PPO, but with out-of-network coverage (unlike an EPO)
• Like an HMO, you need a referral to see a specialist
• Like a PPO, you’ll pay less if you use in-network providers, but have the option to go out-of-network and still receive some coverage

How to choose: Think about how often you’ll need to see medical specialists in 2023. If you don’t anticipate needing specialists, go with the most affordable plan. If you already have certain specialists you see and want to continue seeing, choose either a plan that has those doctors “In network” or one that provides some coverage for out-of-network specialists. A second thing to consider: How much you travel. HMOs and EPOs offer no coverage for out-of-network providers unless it’s a true emergency, so if you travel frequently for work or go to school in a different state, choose a PPO or POS, since they do provide out-of-network coverage.

Before you commit to any plan, look at that plan’s online doctor look-up tool and put in your zip code to see how many doctors are nearby. Make sure there are a good number of doctors within a 10-20 mile radius of where you live.

Decision #2: High- or Low-Deductible?

One of the most important things to know about any plan is the deductible—this is the amount of care you will have to pay for before your insurance coverage kicks in. If you have $1000 deductible, you will pay the first $1000 in medical bills out of your own pocket.  Once you’ve reached your deductible, your insurance will begin to pay the majority of your medical expenses. Note: All plans by law cover certain services (including most preventive care, and birth control) right away, regardless of whether you’ve met your deductible.

High-deductible Plan 

Costs less per month

You pay a higher deductible (i.e. more out-of-pocket) before your insurance starts paying for the majority of your medical expenses

Yearly check-ups, birth control, flu shots, and certain other treatments and medications are 100% covered (even if you haven’t met the deductible)

Low-deductible Plan 

You pay more each month

Your coverage kicks in after a smaller deductible

Yearly check-ups, birth control, flu shots, and certain other treatments and medications are 100% covered (even if you haven’t met the deductible)

How to choose: Of course, you can’t predict the future 100%, but if your medical needs are typically pretty basic (annual check-up, flu shot, birth control) then you’ll likely save a lot of money by choosing a high-deductible plan. Your essential preventive care will be covered with no deductible, and you’ll have the peace of mind of knowing you’ll be covered in the case of an expensive medical crisis. You can set aside money for any medical expenses that don’t reach your deductible with health savings account, or HSA (more below). One caveat: If your employer covers your monthly premium, it probably makes sense to go with the low-deductible plan, since it costs more upfront but your employer is paying for it anyway.

On the other hand, if you already know you’ll have a lot of non-basic medical needs next year (for instance, you have a chronic condition, might need surgery, or plan to get pregnant), then a lower-deductible plan probably makes more sense. That’s also true if you have a partner or kids on your plan — the more people on the plan, the greater the chances at least one of you will have a medical issue. Yes, you’ll pay more each month, but your coverage will kick in a lot sooner when medical expenses occur. 

Decision 3: Bronze vs Platinum?

If you are purchasing your health insurance through the individual marketplace, there are four tiers of insurance plans: Bronze, Silver, Gold, and Platinum. As the names imply, Bronze and Silver cost less each month but shift more of the upfront costs of care to you—they typically have higher deductibles and you will be responsible for larger copays and coinsurance amounts when you do receive coverage. Gold and Platinum plans may also have larger networks of “in-network” providers, and offer more coverage for out-of-network providers. 

Important: The metals don’t mean anything about the quality of care you’ll receive. The care you’ll receive with a “Bronze” plan can be every bit as high-quality as on a “Platinum” plan, it’s just a matter of how much you’ll pay and when.

How to choose: It’s similar to the deductible question. If you’re generally healthy it makes more sense to choose a plan that costs less each month, and costs more if and when you do have a health issue. If you know you’ll have complex medical needs next year, or know you’ll need multiple prescription medications, a gold or platinum plan might make sense.

Decision 4: HSA or FSA?

Flexible Spending Accounts (FSAs) and Healthcare Savings Accounts (HSAs) both let you set money aside, pre-tax, to pay for qualifying health expenses. FSAs are only offered by employers, and allow you to have a certain amount of money deducted from your paycheck and held to be spent on expenses like copays, over-the-counter medications, and any medical expense that isn’t covered by insurance. Note that typically only $500 or less can be rolled over to the next calendar year. This year you may be able to roll over as much as $550 to 2022, but check with your plan to confirm and if your FSA contains more than your plan’s allowed rollover limit be sure to spend it before the end of the year. Check FSAstore.com for things you can buy with FSA money. 

HSAs are only available to people with high-deductible insurance plans, and you can rollover any unspent funds from year to year (unlike FSAs, which have a use-it-or-lose-it rule for anything above $500). You can even invest your HSA money, and it can ultimately be used as retirement savings if you don’t spend it on your health. If you have a high-deductible insurance plan there’s little downside to putting money into an HSA.

How to choose: If you qualify for an HSA or your employer offers an FSA you should 100% put money into it — it puts money in your pocket (instead of the government’s) both by giving you pre-tax dollars for medical expenses and lowering your taxable income. The only thing to be cautious about is putting more money into an FSA than you’ll need, since you can’t rollover more than $500.

4 Important Things to Know

1. If you rely on prescription medications, don’t choose a plan without ensuring that your medication is covered. (Not every plan covers every drug).
2. The decision you make about your health insurance now can’t be changed for a year unless you experience a “qualifying event” like the birth of a child, marriage or divorce, or a job loss. 
3. The government might pay for your monthly premiums! If you buy insurance on the individual market (ie not through an employer) you may qualify for a premium tax credit — and you don’t have to be dead broke to get help. A premium tax credit is typically available to people earning up to 400% of the federal poverty level, and they’ll factor in things like your family size and where you live. It’s easier than it sounds to apply for a premium tax credit — Stride can help.
4. Do NOT go without coverage. We get it that insurance is expensive, especially if you’re buying it on your own. But even if the monthly payments are a burden, and when copays and deductibles are factored in it doesn’t feel like you’re getting enough for your money. But keep in mind that the biggest value of being insured comes from the Out-of-Pocket Maximum. This means that if something big happens to you—a car accident, a dreaded disease—you won’t go bankrupt because there’s a limit on what you’ll have to pay for the year.

Remember: If you are buying healthcare on the individual exchange you have until December 15th to choose your plan for 2023. If you get insurance through your employer, be sure you understand the open enrollment dates for your workplace. 

Have more questions about health insurance?  Check out Stride or Healthcare.gov for guidance.

This blog pro­vides infor­ma­tion about telemed­i­cine, health and related sub­jects. The blog content and any linked materials herein are not intended to be, and should not be con­strued as a substitute for, med­ical or healthcare advice, diagnosis or treatment. Any reader or per­son with a med­ical con­cern should con­sult with an appropriately-licensed physi­cian or other healthcare provider. This blog is provided purely for informational purposes. The views expressed herein are not sponsored by and do not represent the opinions of Nurx™.