How choose a health insurance plan that's right for you

This post is intended as a resource to help members and health care consumers choose a health plan.

Choosing a health insurance plan can be stressful. Between cost considerations, making sure your doctors are covered, and confusing insurance jargon, it's easy to feel overwhelmed by this decision. Our guide to choosing a health plan can help you identify your priorities and choose the plan that best fits your needs.

Download now: What to consider when choosing a new health insurance plan


Step 1 : Understand the most common health care terms

When comparing plans, you'll encounter a variety of health insurance terms that can be confusing if you've never seen them before. Learning the difference between an HMO and a PPO plan will make it easier to choose between these options. It's also helpful to know how deductibles and copayments work, so you can get a better idea of what you'll pay when you actually use your health insurance.

The complete version of this guide, available for download here, contains a helpful glossary of important health care terms and definitions that will help you navigate this decision.

Step 2: Find out if your provider is in the plan’s network

You want to make sure any plan you are considering will offer the convenient, quality care you and your family need. If you already have a trusted doctor or medical team, find out if those providers are in-network. If not, you should find out how much out-of-network services cost with the plan. If you’re not able to access their care, you’ll need to find out if there are comparable doctors and specialists in the network.

To help determine what type of access you need, you should think about the doctors you see today:

  • If you already have a primary care provider (PCP) who coordinates your care and refers you to specialists, an HMO (Health Maintenance Organization) plan where they are in-network might be best.
  • If you need access to a doctor or hospital that isn’t in-network, a PPO (Preferred Provider Organization) plan may be a better option.


Step 3: Understand premiums vs out-of-pocket costs

There are two types of costs for health insurance:

  • The premium is the amount you pay each month. If you receive coverage through an employer, it is usually subtracted directly from your paycheck.
  • Out-of-pocket costs are costs you incur as you use your plan. Copayments, coinsurance, and deductibles are types of cost sharing that may be part of your benefits. You typically pay these costs at the time of service.

What fits your budget best?

Typically, plans with higher premiums have lower out-of-pocket costs and plans with lower premiums have higher out-of-pocket costs.

If you’re comfortable paying more each month to have more controlled costs when you use your health plan for medical or behavioral health services, then a plan with a high premium and lower out-of-pocket
costs might be right for you. If you prefer to pay less each month even though it might cost more when you need care services, look for a plan with a low premium and higher out-of-pocket costs.

Step 4: Assess your medical care needs

In addition to your monthly budget concerns, you should also keep in mind your health care needs when deciding the plan that’s right for you.

For example:

  • Do you or your covered dependents have an ongoing medical condition that requires regular maintenance medication, such as diabetes, high blood pressure, or arthritis?
  • Is anyone in your family planning to have surgery, have a baby, etc.?

How frequently do you access medical care?

If you or your dependents need frequent medical care or anticipate major medical expenses, it may make the most sense for you to look for a health plan with a high monthly premium and a low deductible. If you are in good health and don’t require health care services often, then a lower premium may be the more cost effective option.

Step 5: Review your yearly (and potential) costs

Once you know your plan options, you can calculate how much you’ll pay each year in premium. Then, look at the out-of-pocket costs and note the key differences between the plans you are offered.

You can use the Plan Comparison Worksheet included in the complete version of this guide to compare the costs of each of your plan options, helping you make the best choice for the coming plan year.

Need more help?

If you need help comparing plans, including covered benefits and whether or not a provider is in network, here are some ways to get more information:

  • If you get your insurance through your employer, your Human Resources department or representative can usually help answer questions about the insurance plans available for you to choose from.
  • You can also call the health plan you’re considering. Their customer service staff should be available to answer questions about your plan options, and help you find providers who are in the network.
Back to Blog