A Millennial’s Guide to Buying a Health Plan
Let’s be real. No one actually likes buying health insurance. For lots of people, it’s right up there with onerous tasks such as: going to the dentist, doing your taxes, or sitting next to your weird aunt / uncle at the Thanksgiving table.
But buying a health plan also doesn’t have to be the palm-over-your-face nightmare it’s made out to be. What’s more, we’re going to make things super simple for you this year.
You won’t have to decipher obscure abbreviations like HMO or PPO. And you won’t have to sit on the phone for 35-minutes listening to awful operator music so someone can transfer you down the purgatorial phone line rabbit hole.
No. If you read this 5-minute post, we can pretty much guarantee you’ll find the whole getting health insurance thing totally manageable. Heck, you might even enjoy it. Like how you might enjoy buying groceries, or doing a big load of laundry, or getting an oil change.
Alright, let’s get into it. Here are 4 things you absolutely need to know before you buy your health plan for 2018.
1) Health Insurance 101
Let’s start with 3 key terms you’re gonna see a lot while shopping for health insurance.
Term #1: Catastrophic Plans
Catastrophic Plans are built specifically for healthy folks under the age of 30. These plans have the lowest price tags and generally offer the simplest health benefits.
A Catastrophic plan will cover the basics. It will likely get you a few free doctor visits a year and a free annual check-up. And it will cover your keister in case of, well, a catastrophe.
Key takeaway: if you’re super healthy and under 30, keep the Catastrophic Plan top of mind as you shop for insurance.
Term #2: Health Network
This is the group of docs, hospitals, and other medical providers who have agreed to provide services at a discounted rate for insurance company members. (Here’s what our network looks like, as an example.)
A health plan is really only as strong as its health network. You need to know for sure that you’re getting access to a team of awesome, reliable doctors and hospitals.
If you’re not diligent, you could find yourself traveling an hour to get that sore throat looked at.
Term #3: Deductible
A deductible is the amount you need to reach before your insurance pays for part (or all) of your medical care. A good rule of thumb: high deductible = low premium (what you pay each month).
One big note about deductibles:
Some plans have health benefits that your insurance pays for before you reach your deductible. We’re talking about perks like free doctor visits, free generic prescription drugs, and discounted urgent care visits.
Before you pick your plan, be sure you think about which health services you’ll actually use in the upcoming year (for example: filling a monthly prescription, or a doctor visit for that sinus infection you always seem to get).
Then, review the health plan options to see if any of these services are covered before your deductible kicks in.
If you think you’ll use your health insurance a lot (think: finally getting that knee surgery, or you have a condition that lands you in the doctor’s office a bunch), consider a plan that has a lower deductible.
2) Don’t always judge a plan by its premium
Choosing a health plan based solely on the monthly premium probably is not the best way to go.
Most insurance companies have at least four levels of plans: Catastrophic, Bronze, Silver, and Gold. So give a think to how you’ll use your plan, and how much you’ll pay over the course of the year after premiums and medical costs.
Let’s consider this hypothetical:
Assume you’re comparing a Catastrophic Plan against a Bronze Plan. Let’s say the Catastrophic Plan has a slightly lower premium, but it doesn’t offer the services you could end up spending money on, like prescription drugs, discounted urgent care visits, and primary care doctor visits.
In this case, you would have to determine if paying a slightly higher premium for a plan that covers these services would save you more money and give you greater peace of mind over the course of a year.
3) Keep it simple, studly
If you’re under 30 and pretty darn healthy (like you get sick maybe a few times each year), consider getting a really basic plan, like a Catastrophic Plan or Bronze Plan.
Being uninsured is a pretty bad idea — in fact, the IRS recently stated they will straight up reject tax returns that do not have health insurance disclosure — but it also isn’t great to be over-insured. That is, paying for insurance coverage beyond what is necessary based on how young and healthy you are.
Do you get your health insurance through your company’s group plan?
If you do and you’re not loving it, you should see what’s available on the individual market. Depending on the type of benefits your company plan offers and how much they contribute, it might be less expensive to get insurance on your own.
Because your company may think everyone (read: your 56-year-old CEO) wants a health plan that’s loaded with all kinds of benefits. But if you’re young and healthy, these benefits are probably overkill. Ultimately, this leaves you paying too much for a “rich” health plan when all you may really need are the basics.
4) Enrollment starts on November 1st and ends December 15th.
If you miss the December 15th cutoff date, you can enroll from December 15th – January 12th. But you won’t be covered for the whole month of January. Chilly.
Oh, and before you enroll…
See if you qualify for financial help. If you make under $47,000 a year, you could get some substantial funds to help out. Check that out here.
Does this still sound kind of daunting?
Consider using a broker. Brokers can get a bad rap, but unlike the real estate broker you begrudgingly use, a health insurance broker is actually super helpful and won’t cost you a dime for her or his services. He/she will help you find a plan that fits your lifestyle.