How to Choose the Right Health Insurance Plan During Open Enrollment

It’s open enrollment season. Health insurance companies want you to sign up. But really, why should you? Well, for starters, health insurance is there to protect you from the catastrophic, unexpected, things that can potentially happen to you. If you could see into the future, you might not need health insurance. But, you can’t. If you’re ever in a car accident, get sick from someone sneezing on you out in public, or your cancer screening comes back positive, you’ll be glad you had the insurance.

Be realistic

There are three costs you should concern yourself with: your deductible, your maximum out of pocket costs, and your premium. All three of these needs to be affordable for you. Look over the plans available to you in your state or through your employer.

If your employer is offering more than one plan, don’t always assume the most expensive (highest premium) is the best plan. Often times, these “Cadillac plans” require you to pay a very high premium with low out of pocket costs. But, if you don’t need to use the doctor for much of anything, you’ll spend a lot in insurance and get little benefit in return.

Don’t Be So Emotional

Just because you’ve had a plan “forever” doesn’t mean it’s the best plan out there. A lot of people stick it out with the plan they’ve always had – this is usually just out of habit. They don’t want to change what they perceive as a “good thing.”

If you’ve had a new addition to the family, though, or you’ve just been married or you got a new job that increases your risk for some types of disabilities, you should rethink the type of insurance you carry. Maybe you need something a little more comprehensive.

Children present an interesting problem. You may not go to the doctor’s office often, but your child probably will. In fact, many new parents take their child to the doctor more often than they themselves go. It’s understandable, but it’s a cost you need to factor in, especially if you’re not the type to use your insurance often.

Understand What You’re Buying

Today, it’s getting harder and harder to find cheap health insurance. That’s because the Affordable Care Act has essentially done away with traditional insurance plans and replaced them with a sort of prepaid medical plan. With these plans, you pay a high premium, but you also have high deductibles and mandated “core essential benefits.”

This means that, while you might get benefits that are useful for you, you might also end up paying for coverage you don’t necessarily need. For example, your health insurance must cover maternity care. However, if you’re a single male, you’ll never need maternity care. Your future spouse or girlfriend might, but she’ll likely have her own plan.

Right now, you have a choice of plans with varying deductibles. Basically, you’re going to find that the higher the deductible, the lower the premium you’ll pay. The higher the premium, the lower the deductible. Choose a plan you think you can afford over the long-term. Don’t make a decision based on your immediate circumstances.