From our friends at GreenPath

Choosing the right health insurance plan is critical if you want to save money on your health care expenses. This is the first step for creating a healthcare budget that anticipates any cost you may have to cover down the road. Here are a few tips you can follow to help you choose the right health insurance plan for you and your family:

1. Research the costs of the medical services you think you will use in the following year. Knowing the costs for the medical services you need will help you choose a plan that will cover most of those costs. It will also help you determine how much you need to save to cover the costs that will not be covered by your health insurance provider. Those funds can be deposited into a Health Savings Account or Flexible Spending Account.
2. Use your provider’s website to research individual and family plans. You can also visit healthcare.gov to research health insurance plans. Healthcare.gov provides a marketplace for you to compare different health insurance plans based on your specific needs.
3. Ask these three questions to understand and compare health care plans:

• What is the deductible for this plan? Your deductible is the amount of money you are required to spend before your health insurance will cover your health care expenses. Keep in mind that higher deductible plans typically have lower monthly premiums.
• What are the co-payments or co-insurance amounts associated with this plan? Co-payments or co-insurance are what you pay for medical services after reaching your deductible.
• What is the out-of-pocket maximum for this plan? The out-of-pocket maximum is the amount of money you have to spend on medical services before your health insurance provider pays for your covered services.

What to Do After Choosing the Right Health Insurance Plan

After choosing the most suitable health insurance plan for you and your family, it would be wise to look into opening a Health Savings Account (HSA) or Flexible Spending Account (FSA). These types of accounts enable you to set aside pre-tax funds to save money for expected and unexpected health care expenses.  This means you can save these funds without paying tax on the money (which could result in a larger tax return for you).

You can use the amount of your deductible, co-payments or co-insurance, and/or out-of-pocket maximum to determine how much you should deposit into a health savings account or flexible spending account. Following these tips will help you feel confident in choosing the plan that’s most suitable for you and your family.