5 Reasons to Pay Attention to Your Health Insurance
We get it, health insurance isn’t the most exciting thing, nor is it the easiest to understand. That combination can make it difficult for people to engage. We hate to break it to you, but not thinking about your health insurance could cost you extra money, and lots of it. If you wait to think about your health insurance plan until you need care, chances are, your mind will be on other things and you won’t be thinking clearly.
Here are 5 reasons it’s important to think about your health insurance – (hint: they all save you money!)
1. Choose a plan that suits your family’s needs
There are all kinds of different health insurance plans. Some have high deductibles and lower premiums; and some have lower deductibles and higher premiums. Depending on what type of care you and your family will need this year, you should think about the plan you choose.
Open enrollment at most companies starts in just a few weeks, plus the new health insurance marketplaces open up on Oct. 1. Do some research before you pick a plan.
Tip: If you know you’re going to need a big surgery, like a knee replacement, consider choosing a plan with a lower deductible, because you’ll have to pay your whole deductible up front before your insurance kicks in. Learn more about deductibles.
2. Know what kind of plan you have
Once you’ve chosen your plan, you need to understand what kind of plan you have. When most people go to the doctor and are asked what kind of insurance they have, they don’t know how to answer.
Tip: Always take your health insurance ID card with you to doctor appointments. If your insurance has recently changed, make sure you submit an updated card.
Why is this important? If your doctor doesn’t have updated information, your insurance company could deny your claim and end up charging you full price!
3. Understand how your plan is set up
Health insurance is unlike other types of insurance because it’s something you’ll most likely USE! When you do need care, you’re usually caught up thinking about other things, so take some time and understand how your plan is set up before you need to use it.
By understanding what you pay and when, you can catch errors and save yourself money. It’s easier than you think once you know some of the basics.
Here are a few examples:
Example 1: Sam has an HMO plan with a $1000 deductible and 20% coinsurance. Since Sam has an HMO plan, his care is coordinated through a primary care doctor. If he needs to see a specialist, he has to get a referral from his primary care doctor. Sam chooses an in-network specialist because his plan has what is called a network, meaning he can only see doctors who are in the network of providers his insurance company had an agreement with.
His deductible is $1000 which means he has to pay for all of his care up until he has spent $1000, and then his coinsurance kicks in. If Sam receives a $1500 bill, he would pay the $1000 deductible PLUS 20% of the additional $500 = $1000 + $100 = $1100.
Example 2: Lakshmi has a CHDP plan with a $4500 deductible and 30% coinsurance. Lakshmi has a high-deductible plan, meaning she has to pay out-of-pocket for all of her care up until she has reached $4500. Then her insurance kicks in and pays 70% of her costs, while she pays 30%.
If she receives a $5000 bill, she would pay her $4500 deductible PLUS 30% of the additional $500 = $4500 + $150 = $4650
Her premium (the amount she pays each month to have coverage) is less than Sam’s because she has a higher deductible. Remember, higher deductible usually equals lower premium.
Note: A lot of young people will choose this kind of plan when the health insurance marketplaces open on Oct. 1. It’s important to understand that, while your premium may be low, you’re going to have to pay a lot out-of-pocket before your insurance kicks in. Learn more about paying for a high deductible up front.
4. Choose providers wisely
Here’s one that trips a lot of people up, but it’s fairly easy to avoid. Unless you have Original Medicare, you have a network of providers who are covered by your insurance company. If you choose a provider who is not on that list, an out-of-network provider, you’ll pay more – lots more, possibly even full price.
Always double-check to make sure a provider is in your network. You can either call your insurance company or check their provider database on their website.
Tip: Provider A and provider B may both be in network, but provider B charges 500% more for the same procedure. It sounds drastic, but it’s true. The range of prices for a knee MRI in St. Louis is from $912 to $5409. The fair price for this procedure is $1125 – you shouldn’t have to pay more than that. HooPayz members can use our Find Fair Healthcare Prices tool to search for fair-priced providers near them. Find out more about fair healthcare prices.
5. Choose the right type of care for the situation
Not every injury or symptom requires a trip to the Emergency Room, but some do. It’s important to choose the right type of care for the situation. If your feel your life is at risk, i.e. you’re having chest pains, severe abdominal pains, shortness of breath, etc., head to the ER immediately. If you have a cold, sore throat, sprain, etc., your primary care physician is where you need to be. If your doctor isn’t open, try an Urgent Care center for non-life-threatening situations instead of the ER.
Most plans have a flat copay for ER and Urgent Care visits. ER copays are much higher, so if it’s not a life-threatening situation, consider Urgent Care instead. As you can see, by learning just a little bit more about your health insurance plan and how it works, you can save yourself money, and become a more informed healthcare consumer.