How To Determine Which Health Insurance Plan Is Right For My Family


Review your family's use of health care providers in the last year. Analyze how often family members went to the doctor, whether there are any conditions that warrant ongoing treatment or whether there are any upcoming health issues. Determine, in general, whether your family is at a healthy weight. Considering your family usage of health care services will shape the type of coverage you may need.


Review the options that your employer is offering. Typically, employers offer a Preferred Provider Organization (PPO) and an Health Maintenance Organization (HMO). PPO plans offer a larger network of doctors you may see but may have higher out-of-pocket costs such as the premium and co-pays. The premium is the cost of the plan, and the co-pay is the portion of services you pay for as they are received---your insurer pays the rest. HMO plans are less flexible in what doctors you can visit and require that you stay within a limited network of providers. They often require that you visit a primary care physician before seeing a specialist. However, they are the least expensive option of the two for your family. If you're purchasing a policy independent of an employer, these options are most cost-effective for families with frequent doctor visits.


Consider a High Deductible Health Plan (HDHP) if your family members are not high users of health care services and do not anticipate many future doctor visits. HDHP premiums are usually significantly lower than a PPO or HMO plan and may be accompanied by a Health Reimbursement Account (HRA) into which your employer deposits dollars to pay for your health care. For HDHPs that meet IRS criteria, the covered person is eligible to establish a Health Savings Account (HSA). The money in the HRA and HSA accumulates and rolls over to the next year, making this a wise option for lower users of their health insurance.


Evaluate whether another plan, such as a Point of Service (POS) or Indemnity health plan, is the right option for your family. A POS plan is a hybrid between a PPO and HMO. Like the HMO, you will need to visit a primary care physician, but like a PPO you have a wider network of physicians for referrals. These plans are sometimes offered by employers but are more likely purchased individually and will be priced between a PPO and HMO. Indemnity coverage is the traditional, nonmanaged plan where you can see any doctor you want and the plan reimburses the provider on a fee-for-service basis. These plans have an annual deductible and may have higher premiums than other plan options.


Obtain premium quotes for each type of plan, and complete a cost analysis of each plan's premiums against the type of service you think your family will need to determine what is the right health insurance plan for your family. In addition to cost, for each plan type you'll want to consider their provider network, out-of-pocket costs and what services are covered.

Whether you are choosing among different health insurance plans that your employer is offering or seeking an individual health insurance policy for your family, there are several factors to take into account. Consider your typical health care usage against the type of health insurance plans that are available such as Preferred Provider Organizations (PPOs), Health Maintenance Organizations (HMOs), Indemnity and High Deductible Health Plans (HDHPs).