Illnesses, health conditions and injuries are realities in life that require care and treatment. A health plan can be beneficial in those challenging times — and even in times of wellness. Health insurance is a policy (with a monthly cost) that helps pay for qualified health care services, equipment and prescription medications. Understanding health plans can help maximize benefits and minimize costs.
What are some common types of health plans?
Plans can vary widely in deductible amounts, provider networks, monthly costs and other components. Three common health plans include:
- Preferred Provider Organization (PPO) Plan: This plan contracts with health care providers to create a network. Choosing in-network providers reduces out-of-pocket costs. Plan members can use providers outside the network, but it generally costs more.
- Exclusive Provider Organization (EPO) Plan: This is a managed care plan with services only covered within the plan’s network (except in emergencies).
- High Deductible Health Plan (HDHP): This plan has a higher deductible than traditional plans and is designed to be used with a Health Savings Account (HSA), which can be used to pay for qualified medical expenses pre-tax. The monthly cost is typically lower, but there are higher out-of-pocket costs to reach the plan deductible.
Health Insurance Terms Explained
What are co-pays, deductibles and co-insurance? Health plans use terminology that may seem unfamiliar. Understanding the terms can help with plan comparison and maximize benefits.
- Co-pays: This is a flat amount a plan member pays for a health care service or prescription medication.
- Deductible: This is the amount a plan member pays out-of-pocket before the plan’s co-insurance kicks in. The lower the deductible, the more the health plan typically costs.
- Co-insurance: This is the amount a plan pays for eligible services after the deductible is met. For example, a plan may have 80%/20% co-insurance. This means that after the deductible is met, the plan will pay 80% and the plan member will pay 20% of future costs.
What are the benefits of having a health plan?
Health plans can help ease the costs associated with treatment and provide valuable resources. They help:
- Pay for qualified medical expenses: Once the deductible is met, the plan’s co-insurance begins to pay a portion of qualified medical expenses.
- Limit out-of-pocket costs: Plans have a maximum out-of-pocket (MOOP) to cap the plan member’s annual responsibility.
- Minimize costs: Many plans contract with health care providers to form a network. These providers agree to charge rates that are typically lower than those of providers outside the network.
- Offer preventive care: Routine and preventive care services such as screenings and immunizations are offered at no out-of-pocket cost to the plan member.
- Provide resources: Many plans offer educational materials, wellness resources and care coordinators to help navigate the health care system and promote well-being.
How to Assess and Select a Health Care Plan to Suit Individual Needs
Health plans may be accessible through:
- An employer-sponsored health plan: Most employers with 50 or more employees offer a health plan for full-time employees (including full-time equivalents).1 Some employers pay a portion of the monthly premium to help reduce the cost for employees.
- A spouse’s or parent’s plan: Spouses or dependents under age 26 may be able to enroll in a spouse’s or parent’s plan through their employer.
- The government:
- Health Insurance Marketplace®: This service, operated by the federal government, offers health plan shopping, enrollment services, and income-based assistance.2
- Medicaid: Funded jointly by states and the federal government, Medicaid provides “health coverage to millions of Americans, including eligible low-income adults, children, pregnant women, elderly adults and people with disabilities.”3
- Medicare: This health insurance program is for people aged 65 or older and younger people with disabilities.4
- COBRA (Continuation of Health Coverage): Existing health coverage may be continued for those who have experienced “a job loss, reduction in the hours worked, transition between jobs, death, divorce, and other life events.”5
- Private plans: Licensed health insurance agents may offer private plans through various companies.
- GuideStone®: Those eligible for a GuideStone health plan include paid employees working 20 or more hours per week at an eligible church, agency or institution affiliated with or that shares common religious bonds with the Southern Baptist Convention®. For more information on health plan eligibility, take a look at our health plan FAQs (located toward the bottom of the page).
There’s no “one size fits all” health plan. Consider the following six steps during plan selection.
- Evaluate key factors, such as eligibility requirements, which providers are in the plan’s network and how prescription medications are covered.
- Estimate health care costs for the upcoming year, including office visits, prescription medications, and anticipated procedures or surgeries.
- Understand the deductible. The lower the deductible, the more the health plan typically costs. Those who rarely meet the medical plan’s deductible may want to consider selecting a plan with a higher deductible.
- Consider the co-insurance. Co-insurance is a less critical factor for those who don’t usually meet the plan’s annual deductible. For those who do usually meet the deductible, estimate how much this may cost.
- Calculate the annual cost of coverage. Multiply the monthly rate by 12.
- Calculate the total cost of the plan that’s being considered: Deductible + Co-insurance + Annual Cost of Coverage = Total Cost
How to Save Money on Health Care
It’s possible to maximize benefits while minimizing out-of-pocket expenses. That starts with choosing a plan that best fits anticipated health care needs for the year. Then use providers in the plan’s network for the lowest rates and take advantage of preventive care services at no additional cost. Shop for the best price for health care services, which can vary widely across providers and facilities. Also, consider switching to 90-day mail-order prescriptions and find other ways to save on prescriptions. Explore more ways to reduce health care costs.
Take the Next Step with GuideStone®
Our vision is that every servant of Christ finishes well. Learn about our health plans that align with biblical values and offer valuable wellness tools. For more information, contact us at Insurance@GuideStone.org or 1-844-INS-GUIDE (1-844-467-4843), Monday through Friday, from 7 a.m. to 6 p.m. CT.
GuideStone welcomes the opportunity to share this general information. However, this article is not intended to be relied upon as legal advice or medical advice, diagnosis or treatment.
1IRS.gov/affordable-care-act/employers
2Healthcare.gov
3Medicaid.gov/medicaid/index.html
4Medicare.gov
5DOL.gov/general/topic/health-plans/cobra
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