6 Things You’ll Need to Know When Buying a Health Insurance Plan

Healthcare Writer

Published on March 27th, 2024

Fact checked by: Colleen McGuire

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1. There are different costs based on the healthcare service you desire. Health plan costs include:

  • Premium: A monthly fee is paid to keep coverage active.
  • Deductible: The amount one must pay out-of-pocket before insurance kicks in.
  • Copay: A small fee for each doctor or specialist visit to help cover healthcare costs and your insurance.
  • Coinsurance: After meeting the deductible,  a percentage, e.g., 20%, is required to share costs with insurance.
  •  Out-of-Pocket Maximum: The maximum amount you’ll pay in a year before insurance covers 100%.
  •  In-Network vs. Out-of-Network: The difference in costs based on provider agreements.

2. Subsidies (financial aid) are available to lower your monthly premium costs.

  • ACA subsidies aim to lower monthly payments or provide tax credits for the following year’s tax filing.
  • Thanks to the Inflation Reduction Act, nobody purchasing coverage through the Marketplace has to pay more than 8.5% of their total yearly household income toward the second cheapest Silver plan premium.

3. ACA plans vary. Each type of plan has various coverage levels (by metal tiers), splits of payment responsibility, and provider networks. 

Plan Pricing Varies by Metal Tiers

Metal TierInsurance Company PaysConsumer Pays
Source: Healthcare.gov

There are 4 Types of Health Insurance Plan Networks 

  •    HMO (Health Maintenance Organization): Lower cost with a managed care system.
  •    PPO (Preferred Provider Organization): More flexibility but higher premiums.
  •    EPO (Exclusive Provider Organization): Hybrid plan with in-network coverage.
  •    POS (Point of Service): Requires referrals but covers out-of-network care, although at a higher cost.

4. Medications out-of-pocket costs vary by plan.

Medication costs with health insurance can depend on copayments, coinsurance, deductibles, and/or formulary coverage. 

Plans vary in how much they cover for prescribed drugs, making it crucial to understand your plan’s details to manage medication expenses effectively.

Check if your current medications are covered.

5. You can enroll annually during a specific time and outside of it if you have a Qualifying Life Event (QLE)

 Open Enrollment Period runs from November 1 to January 15, with some state extensions.

 Special Enrollment Periods are available for qualifying life events like marriage or job loss.

6. There are individual and family coverage options. 

Families are not required to purchase one over the other, however. Sometimes it can be best to purchase individual coverage, especially if one family member is sicker than the other.

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Health Insurance terms can be confusing. With so much to consider, being prepared can save time and stress when exploring plan options.

Article Sources 

1. “Plan Types,” HealthCare.gov, n.d., https://www.healthcare.gov/choose-a-plan/plan-types/. Accessed March 26, 2024.

2. “Five Things to Know About Renewal of Extra Affordable Care Act Subsidies in Inflation Reduction Act,” Kaiser Family Foundation, n.d., https://www.kff.org/policy-watch/five-things-to-know-about-renewal-of-extra-affordable-care-act-subsidies-in-inflation-reduction-act/. Accessed March 26, 2024.

3. “Prescription Medications,” HealthCare.gov, n.d., https://www.healthcare.gov/using-marketplace-coverage/prescription-medications/. Accessed March 26, 2024.

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4. “Dates and Deadlines,” HealthCare.gov, n.d., https://www.healthcare.gov/quick-guide/dates-and-deadlines/. Accessed March 26, 2024.

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