How to Compare Health Insurance Plans: 7 Things to Check Before You Enroll

Philip Baxter

Aug 1

4 min read

Updated: 4 days ago

Health insurance can be confusing because two plans that look almost identical at first glance can work very differently when you actually need care.

One plan may have a lower monthly premium but a much higher dedu ctible. Another may cost more each month but give you better access to your doctors, prescriptions, or specialists. And sometimes the cheapest-looking plan isn't actually the least expensive option once you consider how you expect to use your coverage.

So instead of asking only, “How much is it per month?”, here are seven things worth comparing before choosing a health insurance plan.

Health insurance plan comparison graphic showing key factors like premium, deductible, provider network, and prescription coverage.

1. Monthly Premium

Your premium is the amount you pay to keep your health insurance active (your monthly payment).

Naturally, this is one of the first numbers people look at — but it shouldn't be the only one.

A $300-per-month plan isn't automatically better than a $400-per-month plan. If the cheaper plan has significantly higher costs when you actually receive care, the difference can disappear quickly.

**It's the same mentality as buying a used car: you wouldn't walk into a dealership and ask for the “cheapest” car without making sure it runs well and doesn't have any major issues. Most people aren't looking for the lowest cost — they're looking for the best value within their budget. They just aren't always sure what else to look for.

Healthcare.gov similarly recommends considering your total expected yearly costs, not just the monthly premium.

The goal isn't necessarily to find the lowest premium. It's to find coverage that makes sense for both your budget and healthcare needs.

2. Deductible

The deductible is generally the amount you'll pay for certain covered healthcare services before your insurance begins paying according to the terms of the plan.

This is where plans can become difficult to compare.

A lower-premium plan might come with a substantially higher deductible. Another plan may cover certain services before you've met the full deductible.

That's why it's important to look beyond the big deductible number and ask:

What actually applies to the deductible?

Doctor visits, prescriptions, labs, imaging, hospital care and other services can be handled differently depending on the plan.

3. Maximum Out-of-Pocket Cost

This number deserves much more attention than it usually gets.

For covered in-network services, an out-of-pocket maximum generally limits how much you'll have to spend through applicable deductibles, copayments and coinsurance during the plan year. Premiums and certain other expenses don't count toward that limit.

Think about it as your financial exposure if you have a very expensive medical year.

You may rarely reach it — but if you're comparing two plans, it's worth knowing the potential worst-case financial difference.

4. Your Doctor and Hospital Network

Have a doctor you don't want to lose?

Check the network before enrolling.

Don't assume that because an insurance company has your doctor in one network, every plan offered by that company includes the same doctor. Provider networks can vary by individual plan.

This becomes particularly important when comparing different network structures such as PPOs, HMOs and EPOs.

Generally, PPOs permit members to use out-of-network providers at additional cost, while HMOs usually limit non-emergency coverage to their networks. EPOs also generally cover services only within their network except for emergencies. Exact rules depend on the plan.

If you'd like a deeper explanation, read our PPO vs. HMO: What's the Difference? article.

5. Prescription Coverage

If you regularly take medication, don't wait until after enrolling to find out how it's covered.

Health plans can have different formularies, or lists of covered prescription drugs. Your cost can also depend on which drug tier your medication falls into.

When comparing coverage, check:

Whether your prescriptions are covered
What tier they're in
Your expected copay or coinsurance
Whether the plan has a separate prescription deductible
Whether prior authorization or other requirements apply

A plan that looks great everywhere else may not be a great fit if one of your regular prescriptions is poorly covered.

6. Copays and Coinsurance

When considering how to compare health insurance plans there are two different ways you may share costs with your insurance plan:

A copay is generally a fixed amount — for example, $30 for a covered service.
Coinsurance is generally a percentage of the covered cost — for example, 20%.

CMS and HealthCare.gov identify deductibles, copayments and coinsurance as important pieces of a plan's overall cost structure. Centers for Medicare & Medicaid Services

Look at the services you're most likely to use:

Primary care. Specialists. Urgent care. Prescriptions. Labs. Imaging. Emergency care. Hospitalization.

You don't need to predict every medical expense you'll ever have. You just want a realistic picture of how the plan works when you actually use it.

7. How You Actually Use Healthcare

This is the part people sometimes skip.

There isn't one health insurance plan that's automatically the “best” for everybody.

Someone who rarely visits a doctor may prioritize different features than someone who sees specialists regularly.

A family with several prescriptions may have completely different priorities from a self-employed person who travels frequently.

Before choosing coverage, ask yourself:

Do I have doctors I want to keep? Do I take regular prescriptions? Do I travel frequently or spend time in multiple states? Am I expecting surgery, pregnancy, therapy or other significant care? Would I rather pay more each month for potentially lower costs when receiving care? What can I realistically afford if something major happens?

Those answers can narrow down your options surprisingly quickly.

The Bottom Line: Compare the Coverage, Not Just the Price

Health insurance isn't something you should have to choose based on a single number.

Look at the premium, deductible, out-of-pocket maximum, network, prescriptions and cost-sharing together.

There's even a standardized document specifically designed to make this easier: the Summary of Benefits and Coverage (SBC). Health insurers and group health plans (employer plans) provide SBCs so consumers can compare benefits and coverage using a consistent format. Centers for Medicare & Medicaid Services

And if staring at several pages of deductibles, networks, copays and insurance terminology isn't exactly how you wanted to spend your afternoon, you don't have to compare everything alone.

To compare your options with a licensed professional, request a Free Policy Review & Comparison.

At American PATH Insurance, you can work one-on-one with a licensed health insurance advisor to compare available options based on your needs, budget, doctors and prescriptions.

There's no cost to compare, and your information is never sold as a lead.