Health Insurance 101: Here’s everything you need to know about picking a plan | hioscar Blog | Oscar
Health Insurance 101: Here’s everything you need to know about picking a plan
From deductibles to exchanges, this detailed primer covers everything you need to find the right health plan.
Plan Basics Oscar Health Insurance
12 min read
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If you don’t currently get health insurance through your job, family, or another source, you might need to buy your own plan. With endless combinations of insurance companies, plan types, and benefits, it’s hard to know where to start. At Oscar, we totally get how complicated this process can be, so we’re doing everything we can to make health insurance easier to understand. That’s why we created this crash course in health insurance. Let’s get started!
Open Enrollment
First things first: the time period you and your family can sign up for a 2020 health insurance plan is called Open Enrollment (opens in new tab), and for most states, it starts on November 1st. If you’re in California, Open Enrollment starts on October 15th. It’s really important to sign up during this time, because you won’t be able to sign up outside of the Open Enrollment window, unless you experience a qualifying life event (opens in new tab).
Terms to know
There are a few basic health insurance terms you should know before you start shopping. We know. It’s a lot to take in. But having a basic understanding of these terms can really help you make smart decisions as you pick your plan.
: This is the amount you pay every month in order to keep your plan active.
Covered (opens in new tab) services: These are benefits that your health insurance company helps you pay for. How much you pay depends on your plan, and what services you’re getting. Usually, if you pay a higher premium, your health insurance company will cover more of the cost of your care.
Copays and Coinsurance
Copayments (opens in new tab) (or copays) are fixed dollar amounts that you’re responsible for paying for a covered appointment, service, or prescription. Example: let’s say that your copay for seeing your dermatologist is $20. That means that regardless of what the visit actually costs, you only pay $20— and your insurance company pays the rest.
Coinsurance (opens in new tab) is what you owe for a covered appointment, service, or prescription, but it’s calculated as a percentage. This means that the amount you owe will vary depending on how much the service costs. Example: let’s say that seeing your Allergist requires 25% coinsurance. If the visit costs $100, you would owe $25, and your insurance company would pay for the rest.
Deductible and Out-of-pocket Max
Deductible (opens in new tab): This is the amount you have to pay out-of-pocket for covered services before your health insurance company starts paying for certain services. What you pay after you hit your deductible depends on your plan—you may only owe a copay or coinsurance for covered services, or you may not owe anything at all.
Your out-of-pocket max (opens in new tab) is the most you could pay for covered health care in a calendar year aside from your monthly premium. After hitting this max amount, you don’t owe any money for covered services.
Right, but what does that actually mean? Here’s an example: Let’s say you have a plan with a $5,000 deductible and a $7,900 out-of-pocket max. You don’t really go to the doctor for anything other than your annual physical, so you don’t usually pay much for health care other than your monthly premium.
However, one day you require an unexpected procedure. While you come out of the hospital a week later in excellent condition, you still have racked up $60,000 worth of medical bills.
Because you have a deductible and out-of-pocket max, you are only responsible for paying $7,900—the rest is paid by your insurance company. Yes, $7,900 is a lot of money! But it’s a lot better than owing the hospital $60,000 or more.
Higher deductible plans often have lower premiums, which makes them ideal for people who don’t need much care, but want to be covered in case of an emergency.
Here’s another example: Let’s say you have a known health issue that requires you to see a specialist on a regular basis and/or you’re required to take certain medications.
In this case, you already know that you’re going to be needing care, so having a lower deductible makes more sense, since it can help you cut costs in the long run.
If you pick a plan with a deductible of $1,500, your insurance company will help pay for all covered costs once you spend $1,500 towards your medical expenses.
Once you hit your deductible, getting things like imaging procedures and your medications are much less expensive for you. And of course, once you hit your out-of-pocket max, you’re no longer responsible for any covered costs.
Lower deductible plans often come with higher premiums. But if you require regular care, it is probably worth it.
Networks
In-network vs. out-of-network (opens in new tab): Your health insurance company has a network of hospitals and doctors that it works with. Your coverage often depends on whether your doctor is in your health insurance carrier’s network (in-network) or not in this network (out-of-network).
To put it bluntly, if something is out-of-network, it will most likely cost you more money. This is because 1.) out-of-network health care providers haven’t negotiated lower rates with your insurance company and 2.) the money you spend on out-of-network bills doesn’t count towards your in-network deductible or out-of-pocket max (unless it's considered an emergency). Ouch. If you aren’t sure whether your health care provider is in-network or not, call their office and ask.
If you’re an Oscar member, you can use our search tool (opens in new tab) to find in-network doctors, hospitals, and urgent care centers so you can be sure to stay in-network. Or you can call your Concierge team to help you find an in-network health care provider.
Where to get health insurance
Depending on your situation, there are different ways to get health insurance.
On-exchange through a health insurance company (like Oscar). You can now enroll in Oscar’s on-exchange plans directly through hioscar.com. How it works: choose any plan available in your area. If it’s an on-exchange plan, you will be directed to the exchange to determine if you’re eligible for government subsidies. Then you will be taken back to Oscar’s website to complete your enrollment.
Off-exchange through a health insurance company. Off-exchange plans can be purchased directly through a health insurance company (like Oscar (opens in new tab)).
Through a broker. A broker is a licensed agent, aka an expert in health insurance. Brokers can help you enroll through the exchange or directly through an insurance company.
Through an employer. Some people are able to get health insurance through their job. In this case, your employer will provide you with the necessary information. If you recently lost your job and need to find a new health insurance plan, you may qualify for a Special Enrollment Period (opens in new tab).
See what insurance your current doctors take
Make a list of your current doctors and check with their offices to see which insurance plans they take. If you don’t currently have a doctor you like, you can skip this step.
If you regularly see a doctor you can’t live without, you should select an insurance plan they accept, otherwise they’ll be out-of-network and you may be responsible for the full cost of your care if you continue to see them. The same thing goes for any prescription drugs you are currently taking, you should check with your prospective insurance plan to make sure that your medications are covered. To see what health care providers and drugs are covered by Oscar, you can use our search tool (opens in new tab).
Add up your health care costs
How much did you spend on doctor’s visits in the past year? Prescriptions? Diagnostic tests? Did you meet your deductible? This information can help you figure out which plan will be the most cost-effective.
The details of how services are covered by a health plan are laid out in a Schedule of Benefits (opens in new tab), which can be found on the exchange’s website (if you’re purchasing a plan on-exchange) or through an insurance company’s website (if you’re buying off-exchange coverage.) Every plan is different, so you’ll want to pay attention to the fine print.
Compare the types of plans available
The type of insurance plan you buy determines which doctors you can see and how much you have to pay for care. When comparing plans, pay attention to how they cover in-network and out-of-network care, and check to see if referrals and primary care doctors are required.
HMO (Health Maintenance Organization) plans require you to select a primary care doctor, who will serve as the “gatekeeper” for all additional care you receive. Referrals are required before you get care from a specialist, lab, or medical facility, even for preventive screenings such as colonoscopies and mammograms. There are two exceptions: emergencies don’t require a referral with this plan type, and women don’t require referrals to see an OB-GYN. Generally, out-of-network coverage is not covered by HMOs.
PPO (Preferred Provider Organization) plans typically include coverage for care rendered by both in-network and out-of-network doctors. You don’t have to choose a primary care doctor, and referrals aren’t required to see a specialist. Just keep in mind that most covered out-of-network care will be more expensive than in-network visits and services.
EPO (Exclusive Provider Organization) plans (like Oscar) combine the flexibility of a PPO with the cost savings of an HMO. With this plan type, you don’t need to have a primary care doctor to get a referral for a specialist. The catch is that EPO networks are often smaller, and you must stay within them in order for your care to be covered. Out-of-network care may be covered in emergencies. Otherwise, if you receive care from an out-of-network doctor or provider, you’ll be responsible for the cost.
POS (Point of Service) plans are a hybrid of HMO and PPO plans. They provide lower costs for care when you use in-network doctors, and include coverage for out-of-network care with a referral. POS plans require that you elect a primary care doctor and obtain a referral from to get care with a specialist, even if they’re in-network.
Some of these plans are designed to work with Health Savings Accounts (HSAs) (opens in new tab). These accounts, which are available for most plan types, hold pre-tax contributions that you can use to pay for health care expenses.
Some health insurance plans include additional perks for when you’re healthy or under the weather. Depending on your insurance provider, these include:
Oscar offers free Doctor on Call (opens in new tab), where members can talk to a doctor, over the phone, video, or secure message, any time 24/7.*
Step-tracking and fitness rewards. The Oscar app (opens in new tab) can sync with Google Fit or Apple Health, and you earn $1 every day you hit your step goals—up to $100 a year.
Discounts on prescriptions. Starting in 2020, Oscar will have a list of covered drugs with some prescription drugs that cost $3 or less.**
Members-only health classes.
Personalized wellness advice. With Oscar, you get your own team of Concierge (opens in new tab) care guides and a nurse who can help you get the best care for your health needs.
Sometimes these perks aren’t listed up front, especially if you’re buying insurance through a marketplace, so be sure to check out the plans Schedule of Benefits, or the health insurance company’s website for more info on perks.
Choose a metal tier
Health plans are broken into metal tiers (opens in new tab) to help you choose which level best fits your health care needs as well as your budget. Each tier has the same set of benefits but different levels of coverage. Note the monthly premium, deductible, copayments and coinsurance amounts, since they will vary across these tiers.
Bronze plans have the lowest monthly premiums and the highest annual deductibles. Before you’ve met your deductible, you can expect to pay for the cost of your care at a discounted rate. What’s the official math? Your health insurance company will pay 60% of your covered health care costs, and you’ll be responsible for 40%.
Silver plans have a moderate monthly premium and moderate costs when you need care. Deductibles for these plans are typically lower than Bronze plans, but still pretty high, averaging a couple thousand dollars. Some Silver plans offer care with primary care doctors or specialists with a copay before you’ve met your deductible, making it an affordable option if you frequently see a doctor to manage a chronic condition. If you qualify for a cost-sharing reduction (opens in new tab), you must select a Silver plan to receive that benefit. What’s the official math? Your health insurance company will pay 70% of your covered health care costs, and you’ll be responsible for 30%.
Gold plans have a high monthly premium and low costs when you need care. With low deductibles, they’re a great choice if you get a lot of care and are willing to pay a high monthly premium. What’s the official math? Your health insurance company will pay 80% of your covered health care costs, and you will be responsible for 20%.
Platinum plans have the highest monthly premium and the lowest cost when you get care. If you routinely receive services for complex health conditions, are undergoing treatment for a severe health issue, or have a planned surgery, this may be your best option. What’s the official math? Your health insurance company will pay 90% of your covered health care costs, and you’ll be responsible for 10%.
Catastrophic plans are available to people under the age of 30 and those who qualify for a hardship or affordability exemption (opens in new tab) via the marketplace. Monthly premiums are very low, but you can’t use a tax credit for these types of plans. If you qualify for a tax credit, a Bronze or Silver plan might be a better deal. Keep in mind that deductibles are very high for these types of plans, so you may end up paying a lot out-of-pocket if you need care.
Don’t forget about preventive care
With all this talk about costs and percentages, it’s really nice to be able to tell you that some things are free! All Oscar plans include free preventive care, which you and your family should totally take advantage of. Certain plans may include a broader range of preventive services, but you can expect the following basic benefits to be included in any plan you purchase:
Some types of vaccinations and seasonal flu shots.
Maternity benefits including office visits and certain imaging services.
Routine screenings and imaging services such as mammograms and colonoscopies.
Still have questions?
You can talk to one of our experienced Enrollment Guides by calling 1-855-672-2788. You can also get a free quote (opens in new tab) on our website.
*Saver plans in NY and TN require a $15 copay until you reach your deductible.
** Oscar’s $3 prescription drug formulary will become active starting in 2020; the $3 prescription drug formulary will not be offered in NY, NJ, or CA. The $3 list is not available for Catastrophic plans, small group plans, or Medicare.
