Things to Know Before You Pick a Health Insurance Plan


Choosing a health insurance plan isn’t just difficult – it can also be stressful. The healthcare system is full of confusing terms – premiums, deductibles, networks, limits – and you’re hardly alone if you’re struggling to make sense of it all. 

With the stakes so high, it’s important to know your stuff before making a decision. This guide can help teach you the basics – allowing you to make a healthcare choice that works for you and your family. 

The metal categories

Health insurance plans are divided into “metal categories,” which are defined by the percentage of healthcare costs that are paid by the insurance company. The four metal categories are:

Platinum: The insurance company pays 90% of healthcare costs, meaning the customer only has to pay 10%.

Gold: The insurance company pays 80% of healthcare costs. 

Silver: The insurance company pays 70% of healthcare costs.

Bronze: The insurance company pays only 60% of healthcare costs, meaning the customer must pay 40%.

Remember that these categories have nothing to do with the quality of care you receive from medical professionals. They only reflect the way costs are shared between the customer and the company. 

Your total costs for healthcare: premium, deductible & out-of-pocket costs

Premiums, deductibles, and out-of-pocket costs will combine to comprise your total costs for healthcare throughout the year. The premium is the amount you pay each month to the health insurance company. The deductible is the amount of money you’ll pay for care before the company starts covering some or all of the expenses. Out-of-pocket costs represent the money you’ll spend on services that the insurance plan doesn’t cover. When calculating your healthcare budget, make sure you take all of these expenses into account.

Health insurance plan & network types: HMOs, PPOs, and more

Each insurance plan tells you what type of network it includes, and this network type will determine which medical providers and doctors you can visit for care. A health maintenance organization (HMO) plan will only cover non-emergency visits to doctors within the plan’s network of providers. With a preferred provider organization (PPO), meanwhile, you can visit out-of-network doctors – but with an added charge. 

Make sure you understand what type of network a plan uses before making your purchase. That way, you’ll know what options you’ll have when seeking medical care.

Factors to consider when picking a health insurance plan

Choosing a health insurance plan is easier when you have a few set criteria in mind for comparing your options. Here are six concrete factors to consider before making your final purchase:

  • Premiums: How much will the insurance company bill you each month?
  • Out-of-pocket expenses: Based on the deductible and the details of what’s covered and what isn’t, how much do you think you’ll have to pay on your own for medical care?
  • Prescription drug coverage: Does the plan cover the medications you need?
  • Health savings account (HSA) eligibility: Does the plan allow you to create an HSA – a special account for medical expenses that don’t get taxed by the federal government?
  • Networks: Does the plan give you the flexibility you need when choosing doctors and medical specialists?
  • Available perks and benefits: Does the plan include add-ons – like free gym memberships or health coaches – that could help you save money or live a healthier life?

By weighing each of these factors according to your own priorities, you can compare and contrast health insurance plans until you find one that meets your expectations.

Critical benefits every insurance plan should offer

Once you’ve decided that a plan’s general characteristics – those mentioned above – provide what you’re looking for, it’s time to read the fine print and make sure the specific benefits meet your needs. 

Every health insurance plan comes with a list of covered benefits. These pages might be long and confusing, but reading them carefully is the only way to know what you’re actually getting from the insurance company. 

As you scrutinize the details of the plan, here are the critical benefits you should be looking for:

  • Ambulance services
  • Outpatient services
  • Emergency room visits
  • Hospitalization
  • Maternity care
  • Newborn care
  • Mental health services
  • Substance abuse services
  • Prescription drugs
  • Rehabilitative services
  • Laboratory services
  • Preventive care
  • Care for Chronic Diseases
  • Pediatric care

The importance of each of these benefits depends on your unique set of circumstances. If you’re expecting to become a parent soon, then the benefits related to maternity and pediatric care are especially vital. If you have no plans for children any time soon, then they might not be such a priority. 

Whatever your situation, always look carefully at what an insurance plan truly offers. It’s the only way to make sure you end up getting what you pay for.

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About the Author: Ben Clabault is a freelance writer from Sandwich, Massachusetts. He has spent much of his adult life traveling through Latin America. He currently lives with his fiance in Santiago Atitlan, Guatemala. His areas of expertise include travel, marketing, SaaS, and global cultures. You can find his work on Copyfolio and reach out to him on LinkedIn.

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