Four Things To Compare When Deciding on Health Insurance
For more guides on healthcare costs and coverage, check out Health Insurance + Type 2 Diabetes.
It’s the season for selecting health care coverage for next year—and if you’re overwhelmed by the sheer volume of options and confusing insurance jargon, you’re definitely not alone. We’re here to help you wade through the different types of health insurance, so you can pick the plan that’s best for you and for managing your type 1 diabetes (T1D). Because we know it’s crucial to find the best health insurance when you’re living with a chronic condition like diabetes.
HMO, PPO, EPO: What’s the difference?
When you see abbreviations like HMO, PPO and EPO, it may look like a big bowl of alphabet soup, but these letters actually indicate the type of access your plan will give you to health providers in and out of network. The differences between these plans can be small–and can vary between providers, so you may need to dig into the nitty gritty details to make sure you understand the specifics of each plan.
If you have a doctor or endocrinologist that you really like, check to see if they’re an in-network provider through each plan so you can find the plan that will allow you to see them at a lower cost. This can be a helpful way to narrow down insurance options.
Health Maintenance Organization (HMO): An HMO is generally limited to a smaller network of health providers and hospitals who are affiliated with the HMO. Out-of-network care is usually not covered and you’ll need to get a referral from your primary care physician to see a specialist.
Exclusive Provider Organization (EPO): An EMO is a lot like an HMO. There is usually a limited network of providers covered under the plan. But, unlike with an HMO, you can often see a specialist without getting a referral.
Preferred Provider Organization (PPO): A PPO offers a larger network of providers and it’s easier to see an out-of-network provider for care. With a PPO, you’ll usually pay less to visit an in-network provider or hospital, but you can see out-of-network specialists without a referral, at an added cost.
Gold, silver, bronze and platinum: Understanding the metal levels
If you’re getting your health insurance through the Health Insurance Marketplace (like healthcare.gov), you’ll see plans categorized by metallic descriptors, from bronze all the way up to platinum. These designations reflect differences in monthly premiums (how much you pay for health insurance per month), the cost of care (the bill you get from your doctor after each appointment) and your deductible (the amount you need to pay out-of-pocket for healthcare before your health insurance plan will cover more health expenses).
All Marketplace health plans will cover certain preventive services before you hit your deductible, including many immunizations, screenings and birth control. Plans through the Marketplace also offer income-based tax savings if you qualify. And, all Marketplace plans must cover treatment for pre-existing conditions and can’t jack up rates or refuse to pay for essential medical care to treat your diabetes. (This applies to health plans offered through the Marketplace but may not be true for other websites selling health insurance. Use caution if you’re looking at buying a health plan elsewhere.)
Here’s a closer look at what each metal level offers.
- Low monthly premium.
- Higher cost of care.
- High deductibles–often you will need to pay thousands of dollars upfront for care before you meet your deductible.
- Helpful for covering severe medical issues with high health costs, but you’ll need to pay for most routine care without any help from your insurance provider.
- Moderate monthly premium.
- Moderate costs for care.
- Moderate deductibles–usually lower than a bronze plan but still fairly significant.
- High monthly premium.
- Low costs for care.
- Much lower deductibles, usually closer to a few hundred dollars.
- You’ll have a higher monthly health cost but if you anticipate needing regular healthcare throughout the year, it could help you save money in the long run.
- Highest monthly premium.
- Lowest cost for care.
- Deductibles are very low and easy to hit early in the year, so your plan will start covering more costs sooner.
- This plan will cover most of your medical costs and can be a good value if you know you will need frequent or expensive care.
Catastrophic health plans
Catastrophic health plans are only going to pay for worst-case medical scenarios. They come at a low cost but always have a very high deductible, which means you’re going to have to foot the bill for routine or non-catastrophic medical expenses. Catastrophic plans may cover preventive health services, like your annual physical.
You can qualify for a catastrophic plan if you’re under 30 or if you meet certain income-related affordability exemptions. While catastrophic plans may be one of the more affordable options up-front, most medical care will cost more. If you need regular care to treat and manage T1D or other conditions, this would be a costly option.
Consider the whole health insurance package–especially for diabetes care
When you’re selecting healthcare coverage, consider what your total medical costs will be—not just your monthly bill. Important numbers to look at are your monthly premium, deductible, copayments and co-insurance and out-of-pocket maximum (the maximum amount you’ll pay in a single year before your plan pays 100 percent of covered costs).
To find the best plan for you, make a list of your regular health expenses–including doctor visits, medical supplies and prescriptions. If your annual costs add up, it’s probably a smart idea to select a plan with a higher level of coverage–as it will likely save you money in the long run.
Also, check in with each health insurance provider to investigate which of your expected expenses for diabetes services and supplies like insulin, test strips or continuous glucose monitors are covered. You can often find this information in the summary of benefits and coverage for each plan, but you may need to call to ask about specifics.
Here are some example questions to ask to help you estimate your healthcare costs:
- Are prescription drugs and preventative care covered before you meet your deductible?
- Do yearly or quarterly coverage limits apply to treatments or medical supplies you know you’ll need? If so, find out if you can get extra test strips covered, for example, with documentation and prior authorization from your provider.
- If you plan to change to using an insulin pump or replacing your existing equipment, find out if your preferred model is covered and how much you’ll pay (called your co-insurance amount).