How Do I Pick a Health Insurance?

Sep 12 / Jay Zigmont, PhD, MBA, CFP®

Depending on your employment situation and marital status, you may have different options for health insurance coverage. Let's take a look at what to consider when choosing a health insurance plan.

Enrolling in Coverage

You are not allowed to just change your health insurance plan on a whim. Generally, you get an open enrollment period once per year, generally consisting of a few weeks at the end of the calendar year. If you have a qualifying life event, such as getting married or divorced or changing from an employee role to becoming self-employed, you can also change plans then.

Often, you won't be eligible to get on someone else's health insurance plan (or have them join yours) unless you're legally married, but it depends on your state and your employment situation. If you're 65 or older, you're eligible for Medicare, and if you earn a low income, you might qualify for Medicaid, both of which are administered by the federal government.

Consider your own family history when choosing a plan. If you know certain health conditions are common among your family members, don't go cheap on your coverage. It can be tempting to choose the least expensive plan available and call it a day, but the cheapest plan will also generally have the least coverage.

Buying through the Health Insurance Marketplace

If you're not getting insurance through your employer, you'll need to turn to your state's insurance marketplace. Depending on your income, you may get a lower price for coverage. There's a few factors to look at when choosing one of these plans. They'll generally be divided up by metal levels (bronze, silver, gold, platinum), with the bronze options being the cheapest and the platinum the most expensive. You'll be charged a monthly premium that will vary depending on the plan you choose.

What do the numbers mean?

There's a few money figures to factor into deciding whether you can afford a particular plan. The deductible is the first. This is the money you'll have to pay in for medical care before your insurance plan covers any of it. High deductible plans come with lower premium costs, and vice versa. The out-of-pocket max is the total you'll be required to pay before the insurance covers the rest. This is different from the deductible, and includes coinsurance costs or co-pays.

Other Factors to Consider

When picking a health insurance plan, look at what kind of coverage you get for primary care doctor visits and mental health care, as it will vary. And think about where you live versus where your closest medical care services are. If the nearest in-network health clinic for your insurance is an hour away, that's certainly not convenient or ideal.

Ultimately, health care in this country is a mess, so expect to make some compromises, be it on cost or coverage (or likely both). A CERTIFIED FINANCIAL PLANNER™ can help you weigh your options and choose the most reasonable health insurance plan for you. Many states also have insurance brokers who can help you navigate the state marketplace.
Jay Zigmont, PhD, MBA, CFP® is the Founder of Childfree Wealth, a life and financial planning firm dedicated to helping Childfree and Permanently Childless people. Dr. Jay is a CERTIFIED FINANCIAL PLANNER™, Childfree Wealth Specialist, and author of the book “Portraits of Childfree Wealth.” Dr. Jay is the co-host of Childfree Wealth Podcast. His Ph.D. is in Adult Learning from the University of Connecticut.

He has been featured in Fortune, Forbes, MarketWatch, Wall Street Journal, New York Times, Business Insider, CNBC, and many other publications.