How to choose the right health insurance plan for you

Key takeaways 

• Assessing your healthcare needs is essential for selecting the right health insurance plan, focusing on coverage, costs, and provider networks. 
• Comparing plan types, such as HMOs, PPOs, and HDHPs, ensures you find one aligned with your healthcare usage and financial situation. 
• Reviewing out-of-pocket costs and benefits, like prescription drug and mental health coverage, helps you balance affordability with comprehensive care. 

Assess your health insurance needs 

Choosing the right health insurance starts with understanding your healthcare needs. Here’s how to get started: 

• Review your past and future healthcare needs: Think about your medical history and any upcoming treatments or surgeries. Make a list of regular medications or ongoing care you might need. 

• Consider your family’s health: If you have dependents, include their needs, like maternity care, pediatric visits, or specialized care for older family members. 

• Check your preferred doctors and hospitals: Ensure your current providers are included in the plans you’re considering. Use the insurance company’s online directory to confirm they’re in-network. 

Taking these steps helps you choose a plan that fits your specific situation, ensuring better coverage and fewer surprises. 

Choose your health insurance marketplace 

The next step in finding the right health insurance plan is deciding where to shop for coverage. Depending on your employment, income, and state of residence, different marketplaces and programs may be available to you. 

Employer-Sponsored Insurance 

Employer-sponsored plans are cost-effective, with employers sharing premium costs and offering group rates. Enrollment typically happens annually in the fall, with coverage starting January 1. Life events like marriage or childbirth may qualify you for a special enrollment period, usually within 30 days. Confirm deadlines and details with your HR department. 

Alternative options to employer coverage 

If your employer doesn’t provide health insurance, there are several alternatives: 

• Health insurance marketplace: This government-run platform offers a variety of plans, often with income-based subsidies to make premiums and out-of-pocket costs more affordable. 

• Private insurers: These can provide more flexible options but often come with higher premiums and less financial assistance. 

• Government programs: Medicaid or CHIP may be available if you meet specific income or family requirements. These programs offer low-cost or free insurance for eligible individuals and families. 

Explore these options thoroughly to find a plan that meets your healthcare and financial needs. 

Available marketplaces 

Depending on your state, you’ll use either the federal Health Insurance Marketplace (Healthcare.gov) or a state-run marketplace. Both offer plans categorized as bronze, silver, gold, or platinum. Compare coverage and costs to find a plan that fits your needs, and check for unique benefits available through state-run marketplaces. 

Eligibility criteria 

Eligibility for health plans depends on income, residency, and timing. Subsidies are available for households earning 100–400% of the federal poverty level, while Medicaid and CHIP have stricter income limits that vary by state. Applicants must live in the state where they apply and meet residency requirements. Special enrollment periods may apply for life events like marriage, having a baby, or losing other coverage. 

Compare types of health insurance plans 

Choosing the right health insurance involves understanding the various plan types, their costs, and how well they align with your healthcare needs. 

Plan types include: 

• HMO (Health Maintenance Organization): Requires you to use in-network providers and get referrals for specialists. Lower costs but limited flexibility. 

• PPO (Preferred Provider Organization): Offers flexibility to see in- and out-of-network providers without referrals, but costs are higher. 

• EPO (Exclusive Provider Organization): Similar to HMOs, but without referrals. In-network care is required. 

• POS (Point of Service): Combines HMO and PPO features. Requires referrals but allows out-of-network care at a higher cost. 

High Deductible Health Plans (HDHPs) paired with a Health Savings Account (HSA) can lower premiums and let you save pre-tax dollars for medical expenses. Reviewing the summary of benefits for any plan helps you compare coverage, premiums, deductibles, and copays to ensure it fits your budget. 

Consider your family’s specific needs, such as regular doctor visits, prescriptions, or maternity care, and confirm whether the plan requires specialist referrals. HMOs and POS plans usually require them, while PPOs and EPOs offer more direct access to specialists. Matching your needs to the right plan ensures comprehensive and affordable coverage. 

Evaluate plan networks 

The provider network of a health insurance plan determines which doctors, specialists, and hospitals you can access at reduced rates. A plan’s network directly impacts your care options, making it important to choose a plan that includes the providers and facilities you prefer. 

In-network vs. out-of-network 

Understanding the difference between in-network and out-of-network providers is key to managing your healthcare costs effectively. In-network providers are contracted with your insurance to offer services at lower, pre-negotiated rates, reducing your out-of-pocket costs. Out-of-network providers lack these contracts, resulting in significantly higher costs. While PPOs may partially cover out-of-network care, plans like HMOs and EPOs typically do not. 

Preferred doctors 

If you have specific doctors or specialists you trust, check if they are part of the plan’s network before enrolling. This ensures continuity of care and avoids unexpected expenses. Most insurance providers offer online directories to verify whether a doctor is in-network. 

Network size 

The size of a plan’s network affects access to care. Larger networks offer more provider options, ideal for travelers or those in rural areas. Smaller networks often have lower premiums but may limit access to preferred providers. Consider your healthcare needs when choosing between broader access and lower costs. 

Compare out-of-pocket costs 

Key terms explained: 

• Premiums: The monthly amount you pay to maintain your health insurance coverage, regardless of whether you use any medical services. 

• Deductibles: The amount you must pay out-of-pocket for covered healthcare services before your insurance begins to contribute. For example, if your deductible is $1,000, you’ll need to pay that amount before your plan starts covering costs. 

• Copayments: Fixed amounts you pay for specific services (e.g., $20 for a doctor’s visit) after meeting your deductible. Copays are typically lower for in-network care. 

• Coinsurance: The percentage of costs you share with your insurer after reaching your deductible. For instance, if your coinsurance is 20%, you pay 20% of the bill, and your insurer pays the remaining 80%. 

Premiums vs. coverage 

Higher-premium plans typically have lower deductibles, copayments, and coinsurance, making them better for frequent medical care. Lower-premium plans have higher out-of-pocket costs but can be cost-effective if you expect minimal healthcare needs. 

Budgeting for expenses 

Evaluate your income to determine how much you can comfortably spend on premiums, and factor in potential medical expenses like prescriptions or specialist visits. If you have savings or an HSA, a higher deductible plan may be manageable. Choose a plan that balances affordability with the coverage you need for your healthcare situation. 

Compare health insurance benefits 

Under the Affordable Care Act (ACA), all qualified health plans must cover 10 essential health benefits, including outpatient care, emergency services, hospitalization, maternity and newborn care, mental health services, prescription drugs, rehabilitative services, lab tests, preventive care, and pediatric services (including dental and vision). These ensure comprehensive coverage for diverse healthcare needs. 

Some plans offer additional benefits, such as dental, vision, or alternative therapies like acupuncture. Review plan details to identify perks that align with your needs. 

Prescription drug coverage 

Prescription drug coverage varies by plan. Check the formulary to confirm your medications are covered and review cost tiers—generics typically cost less than brand-name or specialty prescription drugs. Be aware of restrictions like prior authorization or refill limits. If you depend on specific prescriptions, select a plan with reliable coverage and manageable costs. 

Mental health services 

All ACA-compliant plans must include mental health services as part of essential benefits. Coverage typically includes: 

• Therapy sessions with licensed professionals. 

• Inpatient and outpatient mental health treatments. 

• Substance use disorder services. 

Check provider networks to ensure access to mental health professionals and confirm copayments or coinsurance costs for these services. 

Managing costs 

When comparing benefits, balance coverage with affordability: 

• If you expect to use healthcare services often, consider a plan with lower copayments and deductibles, even if it has a higher premium. 

• If you rarely seek medical care, a lower-premium plan with higher out-of-pocket costs might save you money. 

Assess your typical healthcare usage and budget to find a plan that meets your financial and medical needs. 

Make an informed decision 

Compare plans side-by-side, weighing coverage, costs, flexibility, and how well they address long-term healthcare needs. Prepare for enrollment by understanding the process, gathering necessary documents, and meeting deadlines. For guidance, use trusted resources like government websites or consult eHealth’s licensed agents for expert advice to clarify options and make the best choice. 

2814-2025