The cost of medical care is steadily climbing, so having family health insurance is more crucial than ever. It can feel overwhelming to find the right plan with so many choices out there. This guide will help you unravel the jargon-laden world of family health insurance and locate coverage that will keep loved ones healthy without breaking your bank account.
Why Family Health Insurance is Even More Important Now
Health emergencies do not carry warnings. A single visit to the emergency room can cost thousands of dollars. A family health care insurance policy is your fiscal safeguard against these high costs for prescriptions and treatments that can leave family budgets in ruins.
There are several benefits to having family plans in contrast to individual coverage. They tend to become increasingly cheaper per individual family member covered. Preventive care is, in fact, included in most plans, and that is important because it can detect a health problem early, before the solution is beyond the budget.
There is no price for peace of mind and knowing your family is covered. Your career and family life are left unburdened from unbearable medical bills.
Types of Family Health Insurance Plans
Health Maintenance Organization (HMO) Plans
You’re required to select a primary care doctor to handle all your care under an HMO plan. You will need a referral from your primary doctor to see a specialist.
Pros:
- Lower monthly premiums
- Lower out-of-pocket costs
- Coordinated care approach
Cons:
- Limited provider network
- Need referrals for specialists
- Less flexibility in choosing doctors
Preferred Provider Organization (PPO) Plans
You have more flexibility in your choice of providers with PPO plans. You can visit specialists without referrals and visit out-of-network doctors, although you will pay more for out-of-network care.
Pros:
- Greater flexibility in provider choice
- No referrals needed for specialists
- Partial coverage for out-of-network care
Cons:
- Higher monthly premiums
- Higher deductibles
- More expensive out-of-pocket costs
Exclusive Provider Organization (EPO) Plans
EPO plans take elements of HMOs and PPOs. There’s no requirement for a referral to see specialists, but you must remain within the plan’s network for coverage.
Pros:
- No referrals required
- Lower costs than PPO plans
- Moderate flexibility
Cons:
- No out-of-network coverage
- Limited provider network
- Less flexibility than PPO plans
Also Check – Critical Illness Insurance: Is It Really Worth Buying?
High-Deductible Health Plans (HDHP)
These plans have a lower monthly premium, but a higher deductible. They’re frequently used with Health Savings Accounts (HSAs), which allow you to set aside money, tax-free, for medical bills.
Pros:
- Lower monthly premiums
- HSA tax benefits
- Good for healthy families
Cons:
- High out-of-pocket costs initially
- Pay full deductible before coverage begins
- May discourage necessary medical care
What to Look for With Family Plans
Comprehensive Coverage Areas
Your family healthcare plan must include the following minimum essential health benefits:
- Emergency services
- Hospitalization
- Prescription drugs
- Maternity and newborn care
- Mental health services
- Pediatric services
- Preventive care
Be sure the plan provides services your family needs. If someone in your family has a chronic disease, check that specialists and medication are covered.
Network Size and Quality
With a larger provider network, you have more choices for doctors and hospitals. See whether your current doctors are part of the network if you want to keep seeing them.
Check out consumer ratings of the quality of hospitals and doctors in the network. You want good care when it’s most important to you.
Prescription Drug Coverage
It can add up if you have a lot of people in a family taking prescription drugs. Find a plan that will cover the drugs your family is taking.
Keep an eye on the plan’s formulary (its list of covered drugs) and tier system. Generic versions of drugs typically cost less than their brand-name counterparts.
Cost Breakdown: What You’ll Actually Pay
When it comes to health insurance, the true cost goes beyond the monthly premium. Here is a breakdown of how much the various types of plans cost on average:
| Plan Type | Monthly Premium* | Deductible Range | Out-of-Pocket Max |
|---|---|---|---|
| HMO | $800-1,200 | $1,000-3,000 | $8,000-12,000 |
| PPO | $1,000-1,600 | $2,000-5,000 | $10,000-16,000 |
| EPO | $900-1,400 | $1,500-4,000 | $9,000-14,000 |
| HDHP | $600-1,000 | $3,000-7,000 | $8,000-15,000 |
*Costs are for family coverage and vary by location, age and the details of your plan.
Hidden Costs to Watch Out For
In addition to premiums and deductibles, look out for these costs:
- Copays for doctor visits
- Coinsurance percentages
- Out-of-network penalties
- Non-covered services
- Prescription drug costs
Add up premiums, deductibles and what you think you will pay out of pocket, based on your family’s typical use of care.
Top-Rated Insurance Companies for Families
National Carriers with Strong Reputations
While many insurance providers have middle-of-the-road service records, a few consistently rank far above par in terms of customer service and coverage quality.
Blue Cross Blue Shield is on the ground in all 50 states with a strong local network. They provide several plan options and have a long record of offering reliable coverage.
Aetna offers comprehensive family plans with reasonable customer service. They provide wellness programs and digital health tools that many families appreciate.
Cigna emphasizes preventive care and wellness programs. They have top-ranking customer service and competitive pricing in several markets.
UnitedHealthcare has the biggest provider network in the nation. They have robust digital tools and readily available resources to help you manage your healthcare.
Regional Players Worth Considering
Don’t forget about local insurance companies that might provide a better value in your region. With these companies, there’s a chance you may get better customer service and fairer pricing.
Kaiser Permanente serves more than 15 states and provides services as well as insurance. This integrated approach might result in improvements in the coordination of care.
How to Pick the Right Plan for Your Family
Assess Your Family’s Health Needs
Begin by writing down health conditions, medicines and typical health care use for each member of your household. You should include both current and possible future needs.
Parents of young children will want to have coverage for pediatric care and preventive services. Families with adolescent children may want to make sure mental health care is well-covered.
Calculate Total Costs
Don’t just consider monthly premiums. Sum the following costs:
- 12 months of premiums
- Expected deductible payments
- Estimated copays and coinsurance
- Prescription drug costs
An online calculator or a basic spreadsheet can help you determine total costs based on a variety of plans.
Also Check – Life Insurance Secrets Agents Don’t Tell You
Think About What You Can Spend and How Much Risk You Want to Take On
High-deductible plans are good if your family doesn’t use healthcare frequently and you want to save on monthly premiums. Lower-deductible plans that carry a higher monthly cost are often a good choice for people with chronic conditions in their family.
Consider your emergency fund and your ability to pay surprise medical bills. If a high deductible would stress your finances, go for a plan with lower out-of-pocket costs.
Enrollment Periods and Special Circumstances
Open Enrollment
Most people can sign up for health insurance only during annual open enrollment, which is usually in November and December for coverage that begins the following January.
Put these dates on your calendar and research options at least a month before enrollment starts. Availability may be limited for popular plans.
Special Enrollment Opportunities
There are some life events that open up special enrollment periods:
- Getting married or divorced
- Having or adopting a baby
- Losing other health coverage
- Moving to a new area
- Changes in income for subsidy qualification
You usually have 60 days after the qualifying event to sign up for a new plan.
Tips to Maximize Your Family Health Plan
Take Advantage of Preventive Care
All plans must cover preventive services with no out-of-pocket costs. This includes:
- Annual physical exams
- Vaccinations
- Cancer screenings
- Well-child visits
Schedule these services on a regular basis so that you can catch health problems early, when they are easier and cheaper to treat.
Use In-Network Providers
If you can stick to your plan’s provider network, doing so can save you thousands of dollars a year. A word of warning: Networks can change, so if you choose an insurer, it’s always a good idea to confirm that your doctors are still part of the network.
Understand Your Prescription Benefits
Generic medications are far less expensive than brand-name drugs. If you don’t already, ask your doctor if generic alternatives are available for prescribed medications.
Some plans have mail order pharmacies with reduced prices for maintenance medications you are on for a long period of time.
Red Flags: Plans to Avoid
Limited Benefit Plans
Some plans offer low premiums but limited coverage. These “skinny” plans are not required to cover essential health benefits and can result in thousands of dollars of medical bills.
Always check the Summary of Benefits and Coverage document to see what is actually covered.
Plans with Extremely High Deductibles
While some families can make high-deductible plans work for them, avoid plans with deductibles so high that you would never realistically reach them.
A plan with a family deductible above $10,000 would require you to pay full price for the majority of your medical care all year.
Companies with Poor Financial Ratings
Look into the financial stability of insurance companies before you enroll. Companies with weak financial ratings might be unable to pay out claims or could go out of business.
Look at the ratings from agencies like A.M. Best, Standard & Poor’s and Moody’s to make sure the company is financially sound.
Making the Final Decision
Selecting family health insurance involves trade-offs between cost, coverage and ease of use. The cheapest plan is not always the best value if it doesn’t cover your family’s needs.
Start by making a comparison chart of your top three plan options. Factor in monthly costs, annual deductibles, how your family’s doctors and pharmacies are covered and the quality of your plan’s provider network.
Consider meeting with a licensed insurance broker who can help demystify complex plan features and look for alternatives that may have passed you by. A lot of brokers offer free consultations and have access to plans from many insurance companies.
And remember that if your current choice isn’t working, you can switch plans during the next open enrollment period. But you’re probably better off picking carefully from the start so you don’t have any unexpected hiccups in your healthcare along the way.
Taking Action: Your Next Steps
Start looking for family health insurance early, even if you are coming up on an enrollment deadline. Collect information about your family’s medical needs, medications and the doctors you prefer.
Compare plans through the official marketplace websites, or with licensed brokers. Steer clear of unlicensed agents or websites that seem too good to be true.
Once you have selected a plan, review all enrollment materials thoroughly and retain copies of important documents. Call the insurance company if you have questions about benefits or claims.
Check This – Life Insurance Secrets Agents Don’t Tell You
Frequently Asked Questions
Q: What can I expect to pay for family health coverage?
A: Prices for family health insurance vary depending on the type of plan you choose and where you live, but they range from around $600 to $1,600 a month in premiums. The total annual cost including deductible and out-of-pocket costs can be as high as $8,000-20,000 for a family of four.
Q: Can I keep my doctor under any health insurance plan?
A: Not necessarily. Each plan has its own provider network. If it is important to you to keep your current doctor, see which plans include that doctor in-network before signing up. Some plans may allow you to see an out-of-network doctor, but you’ll pay much more for out-of-network care.
Q: What is the distinction between a deductible and an out-of-pocket maximum?
A: The deductible is what you have to pay for covered services before your insurance starts paying. The out-of-pocket maximum is the most you’ll pay in a year for services covered by the plan, including deductibles, copayments and coinsurance. After you hit the out-of-pocket max, insurance pays 100% of covered services.
Q: Are all family plans required to cover maternity care?
A: Yes, maternity and newborn care is considered an essential health benefit and must be covered by all ACA-compliant health plans. But coverage and costs may differ by plan.
Q: I just had a baby. Can I add her immediately to my family plan?
A: Yes, most plans offer a 30-60 day window to add a newborn to your plan. The baby is usually covered from the moment of birth, but you do need to inform your insurance company and fill out the appropriate paperwork to enroll the baby fairly quickly.
Q: What if I require emergency care while traveling?
A: Most health insurance plans provide coverage for emergency care, wherever it occurs. But follow-up care may have to be in-network. International travel emergency coverage varies across plans, so make sure you review your policy to understand your coverage in this area.
Q: How can I find out if my medications will be covered?
A: Review the plan’s formulary (drug list) to confirm that your drugs are covered and what tier they fall into. Most generic drugs have the lowest out-of-pocket costs, while some specialty drugs might require pre-authorization and have higher copayments.
Q: Am I able to switch plans if I am not happy with the plan I selected?
A: You can change plans during open enrollment periods or if you have a qualifying life event. But if your current plan is giving you trouble, it might be possible for you to appeal coverage decisions or file complaints with your state insurance commissioner.
Also Read – How to Lower Your Auto Insurance Bill Instantly
