8 Questions to Ask Yourself When Choosing Health Insurance

Written By Sarah Lewis, PharmD on October 17, 2019
  • couple Using Laptop Computer
    What to Ask When Choosing a Health Insurance Plan
    Choosing a health insurance plan can be frustrating and sometimes overwhelming. Not only are the costs often high, but it can also be hard to figure out the right plan for you or your family. To get beyond the frustrations, start by taking stock of your healthcare needs. Ask yourself some questions. Your answers will help you find the plan that will be best for you. Consider the following questions whether you are choosing from employee health plans or buying Affordable Care Act (ACA) health insurance.
  • Health Insurance Benefits book close-up
    1. What does the plan cover?
    Coverage is the healthcare services a plan offers. All Marketplace plans must cover 10 essential health benefits: outpatient care, hospitalization, emergency services, lab tests, mental health and substance abuse treatment, pediatric services (including dental and vision care), prescription drugs, preventive services, rehabilitation services, and pregnancy, maternity and newborn care. Large employers with self-insured plans do not have this requirement. But they usually have equivalent or very similar coverage.
  • male reading paperwork
    2. What are the plan’s limitations?
    All plans have coverage limitations, so it’s important to review them. You will find this information in the plan’s Summary of Benefits and Coverage (SBC). The SBC is a short, plain language description of a plan’s benefits and coverage. All individual and employer-based plans must provide an SBC. They must use a universal glossary of health coverage terms so consumers can easily compare plans. If you are currently enrolled in a plan, the plan will send you an Evidence of Coverage document each year. This is a more detailed document describing a plan’s coverage, how to access coverage, and what you will pay.
  • Insurance word on folder
    3. How much does the plan cost?
    There are two main types of costs you need to consider—monthly premiums and out-of-pocket costs. Out-of-pocket costs include deductibles, coinsurance, and copayments. Generally, plans with lower out-of-pocket costs tend to have higher premiums. Your healthcare needs will help you decide what balance between premiums and out-of-pocket costs is right for you. If you don’t anticipate using many services, a low monthly premium may be a good choice. If you need ongoing care, it may be worth it to pay a higher premium in order to reduce your out-of-pocket expenses. Make sure you check the plan’s yearly maximum out-of-pocket expenses and factor this into your decision.
  • group-of-friendly-healthcare-providers
    4. Which providers are in the plan?
    Health plans usually have a network of providers in their plan. This includes doctors, hospitals, clinics, labs, and sometimes pharmacies. These providers have a contracted price for services with the insurance plan. If you use providers outside the network, it can cost more. The plan will pass the cost on to you in the form of higher out-of-pocket costs. It’s also possible the plan may not cover the service. If you have a preference for specific providers, check to see if the plan includes them. You can usually find this information on a plan’s website in a provider directory. You can also call the provider to verify their participation.
  • Doctor giving business card to patient in clinic office
    5. How does the plan handle specialists and referrals?
    Common healthcare plans include HMOs (health maintenance organizations), PPOs (preferred provider organizations), and POS (point of service) plans. They differ in your ability to see out-of-network providers, your costs, and your flexibility in seeing specialists. In general, HMO insurance requires you to pick a PCP (primary care provider) who coordinates your care. You need referrals from your PCP to see a specialist and the specialist must be in-network. PPO health insurance typically doesn’t require you to choose a PCP or to get referrals. You can see any doctor, but out-of-network providers will cost you more out-of-pocket. POS plans are a hybrid of the two. You can see out-of-network specialists, but you must get a referral from your PCP.
  • Doctor Writing Medical Prescription
    6. What prescription drugs does the plan cover?
    All plans have a prescription formulary—a list of preferred medications they cover and the copayment for each. Your pharmacy copay will usually be lower for formulary drugs. If you take prescription medicine, check the list to see if your drug is on it and how much refills will cost. If your medication isn’t on the formulary list, you may have to pay for it in full or find an alternative medicine. In addition to a formulary, plans may also have prior authorization requirements, quantity limits, and step-therapy protocols.
  • man-holding-two-bottles-of-pills
    7. Does the plan offer ways to save on prescription drugs?
    See if the plan offers money-saving options for filling prescriptions. This can include a mail-order prescription option or a 90-day fill for prescriptions you take on a regular basis. When you consider prescription drug costs, find out whether your pharmacy benefits have a separate deductible. Some plans combine pharmacy and medical deductibles. Others have a medical deductible and a pharmacy deductible. The pharmacy deductible usually applies to brand-name medicines. You can save money by using generic equivalent medicines. You will typically only pay a copayment for these drugs.
  • middle aged Caucasian woman taking notes on paper and talking on smartphone in front of laptop
    8. Do you have specific questions?
    If you are still unsure about a particular plan, get answers to your specific questions. Call the member services department of the health plan you’re considering or talk with someone in your human resources department. If you are using the Marketplace, you can get help comparing and buying plans. The HealthCare.gov website can connect you to registered agents or brokers. You can also find local people and organizations who offer in-person assistance.
8 Questions to Ask When Choosing Health Insurance

About The Author

Sarah Lewis is a pharmacist and a medical writer with over 25 years of experience in various areas of pharmacy practice. Sarah holds a Bachelor of Science in Pharmacy degree from West Virginia University and a Doctor of Pharmacy degree from Massachusetts College of Pharmacy. She completed Pharmacy Practice Residency training at the University of Pittsburgh/VA Pittsburgh Healthcare System. 
  1. Comparing Health Plans’ Benefits and Coverage Summaries. National Disability Navigator Resource Collaborative. http://www.nationaldisabilitynavigator.org/ndnrc-materials/fact-sheets/fact-sheet-1/ 
  2. Evidence of Coverage (EOC). Centers for Medicare and Medicaid Services. https://www.medicare.gov/forms-help-resources/mail-you-get-about-medicare/evidence-of-coverage-eoc 
  3. Get Help Applying for Health Insurance. Centers for Medicare and Medicaid Services. https://www.healthcare.gov/apply-and-enroll/get-help-applying/ 
  4. Get Read to Apply for or Re-Enroll in Your Health Insurance Marketplace Coverage. Centers for Medicare and Medicaid Services. https://marketplace.cms.gov/outreach-and-education/apply-for-or-renew-coverage.pdf 
  5. Getting and Using Health Plan Evidence of Coverage. National Disability Navigator Resource Collaborative. http://www.nationaldisabilitynavigator.org/ndnrc-materials/fact-sheets/fact-sheet-2/ 
  6. Glossary. Centers for Medicare and Medicaid Services. https://www.healthcare.gov/glossary/ 
  7. Health Insurance Plan & Network Types: HMOs, PPOs, and More. Centers for Medicare and Medicaid Services. https://www.healthcare.gov/choose-a-plan/plan-types/ 
  8. HMO, PPO, EPO: How’s A Consumer To Know What Health Plan Is Best? Kaiser Family Foundation. https://khn.org/news/hows-a-consumer-to-know-what-health-plan-is-best/ 
  9. How to Choose a Health Insurance Plan. United Healthcare. https://www.uhc.com/individual-and-family/understanding-health-insurance/how-to-choose-a-plan 
  10. How to Pick a Health Insurance Plan. Consumer Reports. http://www.consumerreports.org/cro/2012/09/understanding-health-insurance/index.htm 
  11. Medical and Prescription Drug Deductibles for Plans Offered in Federally Facilitated and Partnership Marketplaces for 2015. Kaiser Family Foundation. http://kff.org/health-reform/fact-sheet/medical-and-prescription-drug-deductibles-for-plans-offered-in-federally-facilitated-and-partnership-marketplaces-for-2015/ 
  12. Out-of-Pocket Maximum/Limit. Centers for Medicare and Medicaid Services. https://www.healthcare.gov/glossary/out-of-pocket-maximum-limit/ 
  13. Summary of Benefits and Coverage. Centers for Medicare and Medicaid Services. https://www.healthcare.gov/health-care-law-protections/summary-of-benefits-and-coverage/ 
  14. What Marketplace Insurance Plans Cover. Centers for Medicare and Medicaid Services. https://www.healthcare.gov/coverage/what-marketplace-plans-cover/ 

Was this helpful?
THIS TOOL DOES NOT PROVIDE MEDICAL ADVICE. It is intended for informational purposes only. It is not a substitute for professional medical advice, diagnosis or treatment. Never ignore professional medical advice in seeking treatment because of something you have read on the site. If you think you may have a medical emergency, immediately call your doctor or dial 911.