How to Choose Health Insurance

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Contributor, Benzinga
November 22, 2023

When you’re in the market to buy a new car or home, you may have a good idea of what you’re looking for and what you can afford, but what about health insurance? Where and how do you begin if you need a new health insurance plan?

Even if you and your loved ones are in perfect health, the plan you choose could make a significant impact on your financial future. If you get sick and don’t have the right health insurance, you might have to pay hundreds, if not thousands, of dollars in out-of-pocket costs. Here's what you need to know about how to choose health insurance.

Compare Health Insurance Quotes

  • securely through Blue Cross Blue Shield Health Insurance's website
    securely through Blue Cross Blue Shield Health Insurance's website
    Best For:
    Nationwide coverage
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  • securely through Sidecar Health Access Plan's website
    securely through Sidecar Health Access Plan's website
    Best For:
    No enrollment period health insurance
    Read Review

    Plans referred to above are excepted benefit fixed indemnity insurance products marketed and administered by Sidecar Health Insurance Solutions, LLC and underwritten by Sirius America Insurance Company or United States Fire Insurance Company, depending on the state. As an excepted benefit plan, it does not provide comprehensive/major medical expenses coverage, minimum essential coverage, or essential health benefits. You cannot receive a subsidy (premium tax credit and/or cost-sharing reduction) under the ACA in connection with your purchase of such an excepted benefit fixed indemnity insurance plan. Also, the termination or loss of this policy does not entitle you to a special enrollment period to purchase a health benefit plan that qualifies as minimum essential coverage outside of an open enrollment period. Coverage and plan options may vary or may not be available in all states.

  • Best For:
    Access to Kaiser medical specialists
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  • Best For:
    Same day coverage available
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Step-by-Step Guide to Choosing Health Insurance

Health insurance is an essential investment for anyone looking to protect their well-being and financial stability. However, with so many health plan options available, how do you know which one is right for you? Here is a comprehensive guide to choosing health insurance.

Step 1: Consider Your Needs and Budget

Before you choose a health plan, you need to ask yourself a few questions to help narrow your search.

Who Needs Health Insurance Coverage?

Are you just looking for health coverage for yourself or do you have dependents who need coverage, too? Since the Affordable Care Act (ACA) went into effect in 2010, young adults 26 and under are eligible for coverage on your family’s health plan. Even if your children don’t live with you, you can claim them as a dependent and they’ll be covered under your plan.

Are You Required to Buy Health Insurance?

Prior to 2019, if you could afford health insurance and opted not to buy it, you were charged a fee called an Individual Shared Responsibility Payment. You’re not subject to these fees anymore, but not having health insurance has its own costs.

What’s Your Health Insurance Budget?

Cost is a big consideration as you shop for health insurance. You may not need to spend a lot on health insurance if you’re covered through your employer. If covered, you’ll likely pay certain out-of-pocket costs such as a deductible or copay.

A deductible is a specific amount you must pay before your insurance provider pays your claim. A copay is a fixed cost you pay upfront each time you visit your doctor, specialist or another facility, such a laboratory.

According to a 2018 Henry J. Kaiser Family Foundation Employer Health Benefits Survey, the average annual premium for single coverage was $6,896 and $19,616 for family coverage. Covered workers contributed 18% of the cost for single coverage and 29% of the cost for family coverage. Based on these numbers, most employees pay $1,241 annually for individual plans and $5,689 for family plans.

If you need an individual or self-paid plan, you’ll pay an average monthly premium of $476, according to  

What Do You Currently Need in a Health Care Plan?

Some healthcare plans offer all-in-one packages that include prescription benefits, while others offer customized plans you can choose based on your specific health care needs.

How many times a year do you go to the doctor? Do you have any preexisting conditions? Do you take several prescriptions? Do you need vision or dental insurance benefits? Most basic health insurance plans don’t include extensive hearing, vision or dental benefits. The answers to these questions will help you find health insurance best suited to your needs.

Step 2: Government-Funded vs. Employer-Backed Health Care

You can quickly find out if you’re eligible for a government-funded health plan by doing a little online research.

What is Government-Funded Health Insurance?

Depending on certain factors such as income, family size and age, you may be eligible for free or low-cost health insurance. Medicaid qualifications are based on the number of dependents and income as well as several other factors.

If you’re 65 or older, you’re eligible to apply for Medicare. In certain cases, you can apply if you’re under 65 and disabled. Even if open enrollment is over, you may still be able to sign up based on qualifying life events such as marriage or divorce, birth of a child or loss of an employer-paid plan.

What is Employer-Backed Health Insurance?

Contact your company’s human resources department to inquire about health insurance. If you qualify, your company may offer more than one plan. You can research the best option for you by reading the paperwork provided and visiting the plan’s website.

Some companies pay 100% of employees’ health plan premiums, but most require a fixed amount deducted from your paycheck. Familiarize yourself with the fine print on your employer’s health care plan and decide which one suits you best if there’s more than one option.

Step 3: Find a Plan Through a Private Marketplace

If your employer doesn’t offer health care coverage, you can look through the private insurance marketplace. Here are some factors you should consider when comparing health plan options.

How Much Does the Plan Cost?

Plan costs vary depending on what’s included. Many private insurance companies offer a variety of plan types and costs, so do some comparing. If you buy an insurance plan that’s compliant with the ACA, you’ll save money in the form of tax credits.

Basic health insurance plans offer lower premium costs but may charge some a la carte features for services like lab tests, office visit copays and deductibles. Do your research before you sign up for any health insurance plan to see what’s covered and what’s not.

What Type of Health Insurance Plan Do I Need?

There are many kinds of health insurance plans available, but here are the most popular plan types:

Health Maintenance Organization (HMO)

HMO plans contract with specific doctors. Usually, they require a referral to see a specialist. Typically, you can’t go out-of-network unless it’s an emergency. HMO plans encourage preventive health and wellness programs. If you’re open to the idea of choosing a doctor within a designated network, an HMO plan may be right for you.

Preferred Provider Organization (PPO)

If you choose a PPO plan, you pay less if you choose an in-network doctor or specialist. PPOs allow you to see providers without a referral, but you’ll pay more. If you want to keep your current doctor, a PPO plan may be your best bet.

Step 4: Sign Up for a Plan

If you want to get a health plan from the Health Insurance Marketplace, you’ll need to provide some basic information:

  • Social Security numbers
  • Income information for you and everyone in your household (pay stubs, W-2 forms)
  • Information regarding any current health insurance policies you have, including policy numbers

Are There Ways You Can Save Money?

Once you’ve chosen a health insurance plan, there are a few things you can do to save on costs, through prescriptions and insurance premiums.

Saving on Prescriptions

Even if you have good health insurance, prescriptions can be costly. But there are ways you can save money:

  • Buy generic: Generic drugs are cheaper than their name-brand counterparts. Ask your doctor for a generic version.
  • Ask for samples: Your doctor may have free samples of prescriptions you need.
  • Mail Order: You may be able to save money on frequently-used prescriptions by ordering them online in bulk.

Saving on Insurance Premiums

According to, tax credits are available in certain cases and typically depend on your estimated household income on your Health Insurance Marketplace application. Premiums and other costs can run you thousands of dollars each year with even the most basic health care plans. If you can save on prescriptions or premiums, it makes sense to save where you can.

Get Health Insurance Coverage

Choosing the right health insurance company can seem like a daunting task, but it doesn’t have to be. Armed with information and online research, you’ll be able to compare plans and providers and choose the best one for you.  

Frequently Asked Questions


How can I save money on health insurance?


For healthcare plans that comply with the Affordable Care Act, only a handful of rating factors affect your premium. These include age and location, at least one of which can’t be changed. Smokers will pay more in most cases and your choice of plan level can affect premiums as well. Choosing a high deductible health insurance plan can reduce the cost of premiums. These plans can be combined with a health savings account (HSA) to take advantage of tax-free savings for healthcare expenses. Get the cheapest health insurance premium from top providers.


What does health insurance cover?


Most health insurance plans provide the 10 essential health benefits that were part of Obamacare requirements. Coverages include preventive and wellness services, prescription drug coverage, emergency services, ambulatory services, lab services, pediatric services, and more. Many plans cover a wider range of healthcare expenses but may cost more than basic plans or may have higher out-of-pocket costs for some services. Get a custom health insurance quote to cover you and your family today.


Is health insurance required?


The federal mandate that required health insurance has been lifted but some states have enacted state-level mandates that require residents to have health insurance. Even where not required, health insurance can protect your family against catastrophic healthcare costs and help make routine medical expenses more predictable. Get your most affordable quote through our top providers today.


Is HMO or PPO better?


The answer to whether HMO or PPO is better depends on individual needs and preferences. HMOs (Health Maintenance Organizations) typically have lower costs and require the selection of a primary care physician (PCP) who coordinates all healthcare services. They often have more tightly managed networks of doctors and specialists. PPOs (Preferred Provider Organizations), on the other hand, offer more flexibility and allow individuals to receive care from any healthcare provider without a referral. PPO plans usually have higher premiums and offer greater out-of-network coverage. Ultimately, the choice between HMO and PPO depends on factors such as cost, network size, flexibility, and personal healthcare needs. It is recommended to carefully evaluate all aspects before making a decision.