How to Choose Health Insurance That’s Right for You

Learn key insurance terms and how to use them to choose the right health insurance policy for your needs

If you’re like most people, you can’t afford to pay healthcare costs on your own. You need a strong health insurance plan — and possibly also supplemental insurance plan — to protect you from high, out-of-pocket medical costs. But deciding the best healthcare policy for your needs out of myriad of options can be difficult. That’s why we’ve broken down what you need to learn about standard policies, insurance riders, out-of-pocket costs, and more to help you make an educated decision.

What’s the first step?

First, you’ll need to familiarize yourself with industry jargon. You can study this glossary of insurance terms, but you can also keep these important items in mind:

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What is included in a standard health insurance policy?

“When deciding how to choose health insurance, you should think about what types of needs you have,” says Erin Bueltel, product specialist for Medico Insurance Company.
Ask yourself:

  • Do I need a plan that covers prescriptions because I take more than one drug on a regular basis?
  • Do I have a chronic condition that requires regular care?
  • Do I have risk factors to develop a chronic condition?

Bueltel says a lot of insurance plans cover only certain benefits on the base coverage, then insurance companies give customers multiple options of riders, or add-ons, that customers can elect to include with their base coverage.
Here’s a checklist from Bueltel for how to choose the right health insurance policy:

  • Decide if you want a high deductible vs. low deductible
  • Check the coinsurance amount
  • Determine the out-of-pocket maximum
  • Look at covered and non-covered services and riders
  • Include the premium when accounting for the plan’s annual expenses

Bueltel’s advice: Anticipate what you think you might need covered and consider what you can afford. Then think about what you can handle financially if something catastrophic happens and you’re financially responsible for the cost of your medical care.

How do I choose between high deductible vs. low deductible?

What your insurance covers varies, depending on if you select high deductible vs. low deductible plans.
“High deductible plans are better for those that are just looking for catastrophic coverage. Low deductible plans typically have higher premiums, but benefits kick in a lot sooner,” Bueltel says.
Here’s Bueltel’s breakdown of how to choose health insurance based on deductibles and your situation:

  • High deductible: You’re generally healthy, have limited medical costs, and are looking for protection if something major were to happen, like a trip to the emergency room due to an accident or being confined to a hospital for more than a couple of days. You’re okay with a bit of risk — because you may have to pay more out-of-pocket costs to hit your deductible level.
  • Low deductible: You anticipate higher medical costs and more doctor visits. You are risk averse, and/or would like to avoid a lot of up-front, out-of-pocket costs.

How Hospital Indemnity Insurance Fills Medicare Advantage Gaps

What are out-of-pocket costs?

Out-of-pocket costs are what you pay as a patient for medical care. Each plan has an out-of-pocket maximum, which is the largest dollar amount you might pay in a plan year for covered medical services, including copays, coinsurance, and deductibles, but excluding monthly premiums.

What is an insurance rider, and how does it affect my health insurance plan?

Insurance riders are defined as insurance policy amendments to add or exclude coverage for a body part, body system, or health condition. They can provide additional coverage or restrict or limit coverage.
Insurance rider options can include a variety of options – from types of extended care, such as home healthcare or nursing home care, to inflation protection. Be sure to consider your current circumstances and the rider options available as you ponder how to choose the right health insurance policy.

Hospital Indemnity Insurance Can Limit Medicare Observation Billing Effects

How do I choose a supplemental health insurance?

Once you determine your primary health insurance won’t cover all your needs, you can use the same method you used to choose health insurance to also select supplemental insurance. For example, Medico’s Hospital Indemnity insurance not only stands out from other insurance policies because of its base coverage but also because of its riders.
Hospital Indemnity insurance is supplemental hospital insurance that helps pay for an unexpected hospitalization due to illness or injury. In addition to its base coverage of inpatient hospitalization or observation unit monitoring, emergency room service, and inpatient mental health services, it also offers optional riders that include some outpatient benefits, like rehab and surgical centers, ambulance services, skilled nursing facility care, and a lump sum for a cancer diagnosis.
To learn how Hospital Indemnity insurance can pair with your health insurance, visit the Hospital Indemnity insurance page.

Get a FREE Hospital Indemnity insurance quote

Medico Insurance Company disclosures

This webpage is intended to provide a general description of the policy benefits. Policy provisions and benefits may vary from state to state. Please see the policy and riders for complete details. For costs and further details of the coverage, including exclusions, restrictions, or limitations and the terms under which the policy may be continued in force or discontinued, see your producer or contact Medico. Pre-existing conditions are not covered during the first six months after the policy date (may vary by state). To be eligible for benefits, you must receive medically necessary covered care, as defined in the policy.
This is a solicitation of insurance, and a licensed agent/producer may contact you. This is a limited policy. If there is a discrepancy between the webpage and the contract, the contract language prevails.
This policy is not major medical insurance and is not a substitute for major medical insurance. It does not qualify as minimum essential health coverage under the Federal Affordable Care Act. If you purchase this policy only, you will not satisfy the federal requirement that you have health coverage, which has been in effect since Jan. 1, 2014.
1In Pennsylvania, "hospital confinement" is called, "hospital confinement indemnity insurance." In Arkansas, "hospital indemnity insurance" is called "hospital confinement insurance." In Colorado, "hospital indemnity insurance" is called "fixed indemnity insurance policy." In Utah, "hospital indemnity insurance" is called "hospital limited benefit indemnity insurance policy."
2Optional benefits are not available in all states. 
3In Iowa, this rider is called, "Nursing Facility Benefit Rider."

This article may contain links to third party websites, but Medico is neither responsible nor liable for their content, accuracy, or security. Review our Terms and Conditions to learn more.

Photo credit: iStock

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