The calculations described will help you determine what coverage will be most cost-effective for your routine, lower-cost expenses. But remember, in the end, every health insurance benefit plan should protect you against unforeseen medical problems. Make sure your benefits guarantee your financial security against unexpected events, as well as routine medical expenses.
1. Determine whether the doctors and hospital you intend to use for medical services are part of the proposed benefit plan’s network of providers. Health insurance plans usually have a list of medical providers you can choose from—check to see if your doctor is one of them.
2. Examine the “summary plan description.” This document is an outline of your benefits. Make sure you will get all the benefits you are expecting. For instance, what will you pay if you need mental health services? Are the prescription drugs you regularly use covered and what do they cost? If you need them frequently, how are lab tests covered?
3. Calculate your estimated medical expenses for the coming year. For more information on how to estimate these costs, see the previous column.
4. Determine whether the benefits you want will be paid for, based upon your estimated medical costs. For instance, if you need prescription drugs on a monthly basis, you may want to purchase a pharmacy benefit option that lowers out-of-pocket costs for drugs. If you have diabetes, will the benefit pay for all your testing supplies? If you anticipate the need for elective surgery, is it covered and what will the cost be?
5. Determine what the co-pay will be for each benefit option.
6. Determine what the deductible (generally $500, $1,000, $2,500, or $5,000) will be for each benefit option choice.
7. Determine what type of co-insurance applies to the benefit options you are selecting from.
8. Calculate the premium for each deductible and co-insurance level. This is the amount you will pay each month to purchase the health benefit option you choose. On average in 2006, one year of family coverage cost more than $10,000 in premiums.