Why We Need To Understand Health Insurance Plans Before Purchasing Them

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No one enjoys taking time to go through health insurance plans, but they don’t want to get caught without coverage either. We enroll every year to reduce costs, but there’s more to it than meets the eye. Without proper research, we may be signing up for the wrong insurance ones, leading to uncovered services, out-of-pocket costs, and tons of headaches.  

Everyone needs health coverage, but why is it so important to understand? Here’s why you should do your research before purchasing a plan for you and your family. 

Understand How Much Coverage You Need

There’s no straight answer on how much health insurance one person needs. Upon application, it’ll prompt you to disclose any pre-existing conditions, family history, and health habits. Why? It determines how much coverage you’ll need. Here are some factors to consider when looking for the right healthcare plan.

  • Age and lifestyle
  • Risk factors and preventative care
  • Pre-existing conditions or chronic illnesses
  • Family planning and maternity
  • Frequency of medical checkups
  • Prescription drugs
  • Additional services such as vision, hearing, and dental  

These details are important for many reasons, one being that your plan must be suitable for the stage of life you’re in. The older you become, the more coverage you need. If you expect to go to the doctor frequently, opt for a low deductible but a higher premium one to keep your visit costs low. On the other hand, if you’re as healthy as can be, there’s no reason to pay more per month. 

As you can see, no healthcare plan is the same, so you must find one that is the most compatible with you and your family. Calculate how much healthcare you need so that you don’t pay for too much (or too little) coverage every year. 

Calculate Total Costs (And Save Money)

The main purpose of a healthcare plan is to avoid paying out-of-pocket for expensive medical services and procedures. What if you end up spending more because you picked the wrong health coverage? The process is similar to calculating how much you actually need. Look at how often you can your family will want services to estimate monthly vs. yearly cost:

Total Cost = Premium + Deductible + Out-of-Pocket Costs + Any Copayments/Coinsurance

The plan is to have the number of healthcare services you need to stay well and prepare for the unexpected with as little out-of-pocket expenses as possible. Calculate your total costs, how much coverage you need, and you’re on your way to saving money on healthcare. 

It Determines Who You Can See

Another overlooked factor of shopping for health coverage is not paying attention to who is in your policy’s network. You’ll be fine if you’re able to see your in-network primary care physician, but if you’re out of town, be ready to shell out some extra cash. 

HMO Versus PPO

Your needs and situation can determine whether you should go with a Preferred Provider Organization (PPO) plan or the Health Maintenance Organization (HMO) option. HMOs coordinates your care to a limited selection of healthcare professionals. If you need to travel or prefer flexibility, PPOs grant policyholders more freedom to use out-of-network services at a lower cost. 

Take time to do research and understand who is included in your policy’s network. If you’re on the road a lot or expect to make a big move soon, find out what your options are to ensure nationwide coverage. This is especially important if you have a favorite physician, you want to continue seeing. Otherwise, you can select a new primary care professional upon enrollment. 

Know What You Value Most In Your Healthcare Plan

At the end of the day, there’s no “one-size-fits-all” plan that will work for everyone. This is why understanding health insurance – and what you hope to gain from it – is more critical than ever. 

Aside from the cost, coverage, and network, other factors can influence how well your health insurance will work for you. Some game-changing features in your policy can include:

Lifetime Renewability

The kind of coverage you had when you were single may not be as effective for when you’re married with children and older. Have a policy that adjusts to your needs as you age so that you can have insurance at any stage of your life. 

Free Medical Check-up

Are you so healthy you don’t see the point of having health insurance? Keep it that way by getting a policy that includes free routine checkups. However, this doesn’t affect the premium when it’s renewal time.

Health Insurance Discounts, Bonuses, and Perks

Many health insurance plans offer incentives in the form of wellness programs to keep their policyholders healthy and active. These deals are an excellent opportunity to save on services but avoid overspending on a policy you don’t intend to use.   

Prescription Drug Coverage

While many expect the medication to be included in plans, it’s not always the case. It’s not enough to find insurance that provides for prescriptions, but you should also take a look at their list of covered drugs, also known as a drug formulary


Understanding health insurance may not always be easy, but it is an essential part of our well-being. Take time to consider your budget, upcoming life events such as family planning or surgery, and prepare for the future. 

If you need more guidance, talk to a licensed health insurance agent and compare plans through free quotes on a healthcare marketplace. Your health – and your bank account – will thank you.  

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