HOW TO CHOOSE A HEALTH INSURANCE PLAN

Health Insurance Basics

Blue is here to help you understand your health insurance options.

Common Healthcare Terms

With terms like copay, deductible and coinsurance, health insurance can be tricky. Let’s break down the basics of health insurance to get you started on choosing a plan.

Common Healthcare Terms

TERM	DEFINITION
Premium	The amount you pay monthly to be covered by your insurance.
Deductible	The amount you pay for healthcare services before your plan kicks in.
Copay	A set amount you’ll pay for certain doctor visits or prescription drugs. Not all plans have copays.
Coinsurance	A set percentage you pay after your deductible until you reach your out-of-pocket max.
Out-of-Pocket Maximum	The most you will pay for healthcare services in a given calendar year.
Explanation of Benefits (EOB)	Breakdown of the cost of what your doctor charged for your service, what your insurance covered, and what you might still owe.
Network	The approved list of doctors and hospitals that your plan will cover for your medical needs.
Provider	Any doctor or specialist that you see throughout the year for your medical needs.

For more health insurance terms, visit our full glossary.

Glossary

Common Plan Types

You've probably seen the terms PPO and HMO, but what do they mean?

Preferred Provider Organization (PPO)
Preferred Provider Organizations, or more commonly PPOs, are broad network plans with higher monthly premiums.
PPO plans will typically include:

The largest in-network provider access

Access to out-of-network providers at a higher cost
Health Maintenance Organization (HMO)
Health Maintenance Organizations, or more commonly HMOs, are exclusive network plans with lower monthly premiums.
HMO plans will typically include:

A smaller, more exclusive network of providers

Lower monthly premiums

Are you over the age of 65 and shopping for Medicare plans? We have everything you need to know for Medicare all in one place.

Medicare 101

The Healthcare Formula

All health insurance plans will have a deductible and an out-of-pocket maximum. Some plans may have copays and some plans may have coinsurance. Let’s break down what those plans look like and their differences.

Plans with a Copay

Plans with a copay include a set cost for common things like doctors, urgent care, specialist and hospital visits. You’ll pay lower costs for routine care.

Copay Ex. A normal urgent care visit costs $150. Your plan has a copay of $35. You pay $35. Your copay does not count toward paying down your deductible.

Deductible Ex. Your deductible is 1,500. You pay for a procedure that cost $300. You now have $1,200 left before meeting your deductible.

Coinsurance Ex. You’ve reached your deductible, and your plan has a 20% coinsurance. You have a procedure that costs $100. You pay $20 and your insurance pays $80.

Out-of-Pocket Maximum Ex. Your plan has an out-of-pocket maximum of $3,000. Your combined medical expenses have reached $3,000. Your insurance now covers 100% of your medical costs.

Plans without a Copay

Plans without a copay usually do not start covering large medical expenses until you have reached your deductible. You’ll pay higher costs for your routine care, but they will count toward reaching your deductible.

Deductible Ex. Your deductible is 1,500. A normal urgent care visit costs $150. You get charged $150. That cost goes toward your deductible. You now have $1,350 left for your deductible.

Coinsurance Ex. You’ve reached your deductible, and your plan has a 20% coinsurance. You have a procedure that costs $100. You pay $20 and your insurance pays $80.

Out-of-Pocket Maximum Ex. Your plan has an out-of-pocket maximum of $3,000. Your combined medical expenses have reached $3,000. Your insurance now covers 100% of your medical costs.

Affordable Care Act Plan Metal Levels

Plans are categorized by metal levels to make it easy for you to understand the amount of coverage vs. the cost of your monthly premium. Before you get started looking at plans, let’s help you figure out what Metal Level fits your needs.

Bronze Plans
Premium $
Deductible $$$$
Out-of-Pocket Maximum $$$$

Bronze Plans are good for:

People who are willing to pay less monthly but more when they need care

People who want to protect themselves from worst-case medical situations
Silver Plans
Premium $$
Deductible $$$
Out-of-Pocket Maximum $$$

Silver Plans are good for:

Those who qualify for added financial support for reduced cost shares
Gold Plans
Premium $$$
Deductible $$
Out-of-Pocket Maximum $$

Gold Plans are good for

People who are willing to pay more each month to have more costs covered when you need care

People who see the doctor often

Understanding Affordable Care Act (ACA) Financial Assistance

The Affordable Care Act (ACA) helps individuals and families lower their healthcare costs. Your income and household size will determine how much financial help or subsidy you can get.

Premium Tax Credit
Helps pay for all or part of your monthly premium.
Cost-Share Reduction
A discount on your deductibles, copays and coinsurance for Silver-level plans.

Persons in Household	Income range that qualifies for $0 plans	Income range that qualifies for subsidy	Income range that may qualify for a subsidy
1	$20,783 to $22,590	$22,591 to $60,240	$60,241 and above
2	$28,207 to $30,660	$30,661 to $81,760	$81,761 and above
3	$35,632 to $38,730	$38,731 to $103,280	$103,281 and above
4	$43,056 to $46,800	$46,801 to $124,800	$124,801 and above
5	$50,480 to $54,870	$54,871 to $146,320	$146,321 and above
6	$57,905 to $62,940	$62,941 to $167,840	$167,841 and above

^{Source: U.S. Department if Health and Human Services Federal Poverty Level (FPL) Guidelines for 2025}

How to Choose a Health Insurance Plan

Now that you understand how health insurance works and what financial assistance is available, let’s help you determine the questions to ask yourself as you shop for plans.

What are my healthcare needs?

QUESTIONS TO THINK ABOUT	HELPS YOU FIGURE OUT
How often do you visit a doctor?	Do you only go for routine services (like yearly checkups or wellness visits) or an occasional illness? Or, do you have a condition that needs the care of a specialist?
Who do you need to cover?	Do you need a plan for just you? Or, do you need to cover other people in your family? Separate plans may save you money if your health needs are different.
Do you take any prescription drugs regularly?	Costs for prescriptions can be different from one plan to the next. If you take certain medications regularly, you’ll want to check the drug list (sometimes called a formulary) for each plan to: Make sure your drugs are covered, and Find out how much they will cost. With most plans, drugs are assigned to pricing tiers. What you pay for a certain drug will depend on which tier it belongs to.
Do you expect to have any major healthcare needs?	Are you pregnant or planning to get pregnant? Do you expect to have surgery? Are there other healthcare needs you need to discuss with your doctor? If you expect to have surgery or maternity care, you’ll want to pick a plan with a deductible and out-of-pocket maximum that fit your budget.
Do you need coverage out of state?	Do you travel and need medical coverage in another state? Do you have college students on your policy that need coverage in another state?
How much will I spend on healthcare?	Next, you’ll want to take a look at your medical expenses over the past year to understand what you might expect for the coming year. It’s a good idea to understand what you can spend monthly on a premium and balance that against your medical needs. Some plans, such as Affordable Care Act plans, offer financial assistance to help lower healthcare costs.
Are my doctors in my network?	Probably the most important part of choosing a plan is ensuring that your care providers are in our network. Be sure to write down your primary care physician and any specialists you see and look them up to ensure they are in-network for the plan you want to purchase. Find a Doctor
Are my prescription drugs covered?	The prescriptions you take are an important part of your care plan. Before choosing an insurance plan, you’ll want to know what tier your current medication falls into, whether it is brand name or generic, and what the drug copay is for that tier. View our Formulary