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How to Choose Health Insurance
A free, plain-language guide to picking a plan — employer coverage, family coverage, and how to protect your access to the doctors and hospitals you actually use. Every recommendation is grounded in the same tools free state SHIP/SHIBA counselors use.
Choosing an employer health plan
Most workers face this decision during a 2–3 week open enrollment window each fall. HR typically hands you a benefits packet and disappears — but every plan is legally required to give you a standardized Summary of Benefits and Coverage (SBC) that lets you compare options directly.
- 1
Pull the SBC for every plan option
The Summary of Benefits and Coverage is standardized by federal law. Each plan's SBC lists the deductible, out-of-pocket max, and coinsurance in the same format so you can compare apples to apples.
- 2
Add up total annual cost
Annual premium (your share) + expected medical spend + prescriptions. A plan with a $200/month cheaper premium but a $3,000 higher deductible costs more if you'll hit the deductible.
- 3
Check HSA / FSA eligibility
Only HSA-qualified HDHPs let you contribute to a Health Savings Account. HSA contributions are triple tax-advantaged (deductible, grow tax-free, tax-free withdrawal for medical). If your employer contributes to the HSA, factor that in.
- 4
Verify your doctors are in-network
Employer plans sometimes change network administrators year-to-year (Aetna → Cigna, Anthem → UHC). A doctor in-network last year may not be this year. Verify with the insurer's directory, not HR.
Choosing family coverage
Family plans are not just "individual coverage × N." They have a separate family deductible and family out-of-pocket maximum, and the way they aggregate individual spending can dramatically change your total cost.
- 1
Inventory every family member's care
Pediatric visits, therapies, prescriptions, planned deliveries, orthodontia, specialist visits. Add expected annual spend per person.
- 2
Understand the family deductible
Most plans have both individual and family deductibles. Some use aggregate (any combination hits the family total), others use embedded (each person also has their own cap).
- 3
Compare 'split family' vs 'one plan'
If both parents have employer coverage, model: kids on Plan A + one parent on Plan B vs whole family on the richer plan. Coordination of benefits rules matter for kids.
- 4
Check pediatric dental and vision
ACA marketplace plans include pediatric dental/vision. Employer plans often don't — you may need a standalone dental plan.
Protecting your network access
The single most common regret patients report is enrolling in the lowest-premium plan and then discovering their primary doctor, hospital system, or specialist is out-of-network. These are the exact questions our advocates recommend asking any counselor or broker:
Don't shop on premium alone — shop on network access
The cheapest premium often hides a narrow network or a punishing drug formulary. Here's how to ask the right questions before you enroll.
List your doctors and hospitals first
Write down every clinician, hospital system, and pharmacy you actually use. Ask the counselor or broker to check each one against the plan's in-network directory — not just the plan's marketing page.
List your medications and ask about the formulary tier
Same plan, same drug can be Tier 1 or Tier 4 depending on the insurer. Ask: 'Is each of my drugs on the formulary, and what tier?' A cheap premium with a Tier 4 specialty drug can cost more than a richer plan.
Ask for the plan's network breadth, not just the name
Networks labeled HMO, EPO, or 'narrow/select' often exclude major hospital systems. Ask: 'Is this a broad, standard, or narrow network?' and 'Which local hospital systems are in-network?'
Confirm specialists and referrals
If you see a cardiologist, oncologist, or mental-health provider, confirm they're in-network AND accepting new patients under that plan. Ask if a referral from primary care is required.
Use SHIP / SHIBA before you call a broker
State counselors (SHIBA in WA, HICAP in CA, HIICAP in NY) are free and don't earn commissions. Brokers get paid by insurers — they may steer you toward plans that pay them more.
Get the network promise in writing
Before enrolling, request written confirmation that your specific providers are in-network for the plan year. Networks can change — a screenshot of the directory with today's date protects you.
Educational guidance only. For a personalized review, contact your state's SHIP office (free) or a licensed patient advocate.
Total-cost worksheet
Don't compare premiums alone. Total annual cost = premium + expected out-of-pocket spend, capped at the plan's out-of-pocket maximum. Adjust the sliders and plan details below to see how two plans compare for your situation:
Interactive worksheet
| Cost breakdown | Plan A (low premium)← lower total | Plan B (rich benefits) |
|---|---|---|
| Annual premium | $3,600 | $5,400 |
| Estimated out-of-pocket | $2,000 | $1,200 |
| Monthly average | $467/mo | $550/mo |
| Total annual cost | $5,600 | $6,600 |
Ready to see real plans?
Compare carriers in your state side-by-side with pros, cons, and estimated cost.
Estimates only. Actual costs depend on network status, formulary tiers, copays, and coordination of benefits. Coinsurance calculation assumes all spend after the deductible is in-network and subject to the plan's coinsurance rate up to the out-of-pocket maximum.
A cheaper premium usually wins in a light year. A richer plan usually wins the moment you have a hospitalization, surgery, or new chronic diagnosis. Pick based on your realistic risk, not your best-case year.
Free counselors — every state
Before you talk to a broker, talk to a SHIP counselor. Every state runs a federally-funded program that provides free, unbiased plan comparison. Counselors will match plans to your actual doctors and medications, not to their commission structure.
Every state runs a free, unbiased program (called SHIBA in Washington). Counselors look at your location, doctors, and medications to recommend plans with the strongest network access — not just the cheapest premium.
Glossary of health insurance terms
Plain-language definitions of the jargon you'll see on plan documents, EOBs, and enrollment portals. Each term links to the section of this guide that explains it in context.
- Deductible
- The amount you pay out-of-pocket for covered services each year before the plan starts paying its share. See: Employer plans →
- Out-of-pocket maximum (OOP max)
- The most you'll pay for covered in-network care in a plan year. Once you hit it, the plan pays 100% of covered costs. See: Total-cost worksheet →
- Coinsurance
- Your percentage share of a covered service after you've met the deductible (e.g. 20% coinsurance means you pay 20%, the plan pays 80%). See: Total-cost worksheet →
- Copay
- A flat dollar amount you pay for a specific service (e.g. $30 for a primary-care visit), usually not subject to the deductible. See: Employer plans →
- In-network
- Providers and facilities that have a contracted rate with your insurer. Care from in-network providers costs dramatically less. See: Network access →
- Out-of-network
- Providers without a contract with your insurer. You typically pay much more — sometimes the full billed charge. See: Network access →
- Formulary
- The list of prescription drugs your plan covers, usually organized in tiers. Tier determines your copay or coinsurance. See: Employer plans →
- Summary of Benefits and Coverage (SBC)
- A standardized document every plan must provide that lets you compare deductibles, OOP max, coinsurance, and coverage examples side by side. See: Employer plans →
- HDHP (High-Deductible Health Plan)
- A plan with a higher-than-average deductible, usually paired with lower premiums and eligibility for a Health Savings Account (HSA). See: Employer plans →
- HSA (Health Savings Account)
- A tax-advantaged savings account you can contribute to only if enrolled in an HDHP. Money rolls over year to year and can be invested. See: Employer plans →
- FSA (Flexible Spending Account)
- A pre-tax employer account for medical expenses. Unlike an HSA, most funds must be used within the plan year or forfeited. See: Employer plans →
- Aggregate vs embedded deductible
- Aggregate: the family deductible must be met before any individual gets post-deductible coverage. Embedded: each person has an individual cap within the family total. See: Family coverage →
- Coordination of benefits
- Rules that determine which plan pays first when someone is covered by more than one plan (common for kids with two working parents). See: Family coverage →
- Referral
- A written recommendation from your primary-care doctor required by some plans (especially HMOs) before you see a specialist. See: Network access →
- Explanation of Benefits (EOB)
- A statement from your insurer after a claim showing what was billed, what the plan paid, and what you owe. Not a bill — but check it against every bill you receive. See: Total-cost worksheet →
- SHIP / SHIBA
- State Health Insurance Assistance Program — free, unbiased, federally-funded counselors in every state. Called SHIBA in Washington, HICAP in California, HIICAP in New York. See: Free counselors →
Frequently asked questions
How do I choose the right health insurance plan?
Start with the providers, hospitals, and medications you actually use — not the premium. Compare each candidate plan's in-network directory and drug formulary against your list. Then estimate your total annual cost as premium + expected out-of-pocket, not premium alone. Free state SHIP/SHIBA counselors can walk you through this at no charge.
How do I pick a health insurance plan from my employer?
During open enrollment, request the Summary of Benefits and Coverage (SBC) for each plan option. Compare the deductible, out-of-pocket maximum, coinsurance, and network tier. If your employer offers a High-Deductible Health Plan (HDHP) with an HSA, the tax-advantaged HSA contribution often makes the total cost lower than a lower-deductible plan — but only if you can absorb a large upfront bill.
How do I choose family health insurance?
Add up expected care for every family member: pediatric visits, ongoing prescriptions, planned procedures, and any specialists. Family plans have a separate family out-of-pocket maximum — usually 2x the individual limit. If both parents have employer coverage, run the numbers on splitting the family across both plans versus enrolling everyone on the richer plan.
How do I choose a deductible for my health insurance?
A higher deductible means a lower premium but more out-of-pocket before coverage kicks in. Rule of thumb: pick the highest deductible you could pay in cash tomorrow without borrowing. If that's $1,500, don't take a $5,000 deductible just to save $30/month on premium.
What is a narrow network and should I avoid it?
A narrow network is a plan that contracts with a limited set of hospitals and doctors — often excluding major academic medical centers. Narrow-network plans (labeled EPO, HMO, or 'select') have lower premiums but can leave you without in-network care if you travel, need a specialist, or are diagnosed with a serious condition. Confirm your specific providers are in-network before enrolling.
Should I use a health insurance broker or a SHIP counselor?
Brokers are paid by insurers and may steer you toward plans that pay them higher commissions. SHIP counselors (called SHIBA in Washington, HICAP in California, HIICAP in New York) are free, federally-funded, and unbiased. Use SHIP first — then a broker only to enroll in the plan you've already chosen.
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<a href="https://themurraystandard.org/how-to-choose-health-insurance">How to Choose Health Insurance — The Murray Standard</a>