Comparing Health Insurance Plans

Determine Your Subsidy Eligibility

If you need to purchase your own health insurance, a good first step is to find out if you’re eligible for a subsidy that will help pay for your health insurance.  If you’re eligible for a subsidy, you will need to purchase a subsidy-eligible plan to take advantage of it.  You can find subsidy-eligible plans in your state’s public marketplace (if your state has one), the federal marketplace (if your state doesn’t have its own), through a broker or possibly from an insurance company directly.

If you do not qualify for a subsidy, or do not want to purchase a subsidy-eligible plan, you can purchase a plan from a broker or directly from an insurer.

Review Your Current Plan Costs and Benefits

If you already have health insurance, reviewing what you like or don’t like about your current plan can help form a basis for comparison with others.  Two common areas of dissatisfaction are costs and provider networks.

You should be able to view your network of providers on your insurer’s member portal or in a network provider directory. You can also call the customer service line and speak to a representative.

To review your costs, look through your current insurance policy or visit your insurer’s member portal. Download your claims from the past year and see what you’ve been spending. How much is your deductible? How much is your monthly premium? Do you have a copay?  Is your plan compatible with a Health Savings Account (HSA)?

Here are a few additional questions to consider:

• Are you happy with the doctors and facilities you’ve been using?
• Do you have to get a referral to see a specialist?
• Is preventive care covered?
• Are you covered if you get out-of-network care?
• Are your medications covered?

Understand the Difference between Types of Health Insurance Plans

If you have a choice between different types of insurance plans, understanding how they differ is important in determining if a plan will fit your needs.

Below are comparisons for some of the more common types of plans you’ll encounter.

HMO vs. PPO

Because they're so common, we’ve developed an in-depth article comparing HMO and PPO plans.  In short, an HMO will generally feature lower premiums, but there will be no coverage outside the provider network, except in case of emergency.  Additionally, HMOs will typically require care and specialist referrals to be coordinated through a Primary Care Physician.  PPOs also have a provider network, but care outside the network is covered, though at a lower rate. There is usually no need to choose or obtain referrals from a primary care physician. 

HMO vs. EPO: Plan Comparison

Very similar to an HMO plan, an EPO is a type of insurance plan that requires you to use doctors and hospitals in the network, with the exception of emergency care. But unlike an HMO, you do not have to select a Primary Care Physician, nor do you need a referral to see a specialist.

EPO vs. PPO: Plan Comparison

An EPO is a type of insurance plan that requires you to use doctors and hospitals in the network, with the exception of emergency care. While PPOs also have a network of providers, they usually provide coverage for out-of-network care, but at a reduced rate.  In most cases, you do not have to select a Primary Care Physician, nor do you need a referral to see a specialist with a PPO or EPO plan.

HMO vs. POS: Plan Comparison

Similar to an HMO plan, POS plans generally require you to choose a primary care physician (PCP) who will provide referrals to specialists when necessary. Care provided by your PCP is usually not subject to a deductible. Preventive care benefits are also typically included. Unlike an HMO however, there is some coverage for out-of-network care, though at a rate considerably less than coverage for in-network care. If your PCP makes a referral to an out-of-network provider, the costs are most likely fully covered.

Take Stock of Your Medical Costs and Needs

Claims data referenced on or downloaded from your current insurer’s member portal can give you a better idea of what medical care you’ve been using, and what it has cost both you and your insurer.  While past usage is no guarantee for the future, you will at least have a starting point.

If there is medical care you expect to need in the future that you haven’t needed in the past (e.g., you’re expecting your first child), you may be able to get an idea of the potential costs by consulting your current insurer’s cost estimator.  Insurers often create these sorts of tools to help their members shop for medical care.  Such tools will provide estimates for procedures across different providers, and while the providers and costs shown will be for your current plan, they will again provide a starting point for estimating your future medical costs.

Armed with information about current and future medical needs, you’ll be better able to review your plan options by applying your estimated costs to the plans you are considering.

Compare Plan Networks

All the health insurance plans discussed above include a network of doctors and hospitals, but the size and scope of those networks can vary, even for plans of the same type. In most every case, you can save money by using doctors and hospitals within the network. That’s because the health insurance company has a contract for lower rates with those specific providers.

As discussed previously, some plans will allow you to use out-of-network providers, but it will cost you more out of your own pocket. Other plans will not cover any care received outside of the network. It’s a good idea to see if your preferred doctors and hospitals are in the networks of plans you are considering. It could be an important part of your decision.

Putting it All Together

Here’s a summary of the tips offered above:

• See if you’re eligible for a subsidy, so you can determine what your premiums will be and so you’ll know where you need to shop.
• Review your current plan to understand how it does or does not meet your needs, and keep this in mind as you review your options.
• Understand the different types of insurance plans to understand how your choices will impact your costs and your satisfaction with your plan.
• Get claims and treatment cost data from your current insurer’s member portal to understand past and potential future medical costs.  Use this information to estimate out-of-pocket costs for the other plans you’re considering.
• Research the networks for the plans you are considering to see if your preferred doctors and hospitals are included.