Five Tips Essential to Selecting Health Insurance

Shopping for health insurance can be confusing because health insurance has many variables. When you select a health insurance policy, you need to know not only the monthly recurring premium but an estimate of your true out-of-pocket costs for each plan you consider. This is because most policies, besides the monthly premium, have co-pays, co-insurance, and deductibles. Add to all that, contracts have terms and conditions laden with legal jargon and unfamiliar terms. Understanding some of the important points will help. Here are five tips to make your journey into the health insurance market more understandable.

1. Deadlines

Know your enrollment deadlines. When you are first employed, your employer will have a timeline set to select a policy. If you miss a deadline, you may be without insurance for an entire year or longer. The same holds for Medicare. With Medicare, you have an initial enrollment period, and if you miss that, you may be restricted from when you can apply. Mark mark your calendar with important enrollment dates, so you don’t miss them.

Most employers and Medicare have an annual open enrollment period where you can change your plan for the next year. With Medicare, this only applies to those already enrolled. If you purchase through your state's or the federal marketplace, you too will have an annual enrollment period. Do an online search and ask questions such as when my state’s annual health insurance open enrollment or when can I change my Medicare Supplement plan?

2. Initial Enrollment

The Human Resource office at your employer is the office that handles health insurance, and they will provide information on available plans. If you buy through the federal or state marketplace, you can search the Health Insurance Marketplace website for enrollment information.

If you’re turning 65 and going on Medicare, you may have to apply. You will only be automatically enrolled if you are already collecting social security. The Social Security Administration (SSA) administers Medicare. You can enroll through the SSA.gov website or make an appointment with your local SSA office.  

3. Open Enrollment

It’s to your advantage to shop with each opportunity offered. This doesn't mean you will change policies each year, but you should look. There may be a more advantageous policy for your situation. Policies can and often do change each year. Prices also change. A big issue in the recent years has been that provider networks change. If you have specific providers or specialists that you want to stay with, you need to verify that the insurance policy you select works with them. Most health insurance websites have a consumer portal where you verify that your providers are in the network.

4. Mid-Year Changes

In addition to initial enrollment and annual enrollment periods, there are circumstances where you can change policies outside of your open enrollment. These are generally called qualifying life events. Marriage, divorce, birth or adoption of a child, or a move out of the service area, are common qualifying events. Check with your health insurance policy for what they consider a qualifying event. 

5. Pharmacy Formularies

Before enrolling in a new plan, gather a list of your current medications and verify them with the plan's formulary. The formulary is a list of drugs that they agree to cover and at what tier. Once you know the tier, review the plan information and see how much your co-pay is for each tier.  Categorizing medications by tier is not standard for all companies. Meaning a tier 1 on one company can be a tier 2 on a different company. If you take medications, this is an important step during your initial and open enrollment. Each year health insurance plans negotiate what they will cover and at what cost.

Health insurance is necessary, and it helps to have a basic understanding of some of the essential information. Once you've made your initial enrollment decision, take the opportunity to review plans each time you are given an annual opportunity. Don't hesitate to contact the plan you are considering directly with questions.