Shopping for insurance? Better know the real cost

Shopping season is upon us again. Not just the holiday rush, but Open Enrollment for health insurance through the Affordable Care Act. You need to sign up by December 15, 2014, if you want to get health coverage that begins January 1. If you would like health coverage that kicks in later next year, you need to sign up by February 15, 2015.

But unlike buying the hottest toys or flat screen TVs, shopping for health insurance requires looking beyond the sticker price.

The premium — the price you pay each month for insurance — is just one piece of the puzzle. You need to look not only at the cost to buy the insurance, but also the cost to use it.

First and foremost, you need to ask if there is a deductible - the amount you must pay out of pocket before receiving insurance benefits.  A high deductible can cancel out the savings of a low monthly premium. For example, let's say you buy a policy with a $500 deductible. One visit to the doctor for an ear infection could cost more than $110, plus the cost of the medication. And you would need to pay those expenses out of your pocket, until you spent $500, when insurance coverage kicks in. Averaged out over a year, that's like spending more than $40 dollars a month on top of the cost of the premium.

You also need to consider whether any medical services are covered even if you have not yet met the deductible. Some plans pay for emergency room benefits before you have satisfied the deductible, while other plans do not. The same can be true for prescription drugs.

You also need to consider the plan's copayments, often called "copays" - the fees you must pay each time you receive a medical service. If you expect to receive regular care, this cost may be predictable. However, you also have to consider co-insurance - a percentage of the cost of a medical service you must pay. For example, if the health plan pays 80 percent of the cost of a service, you must pay the remaining 20 percent. The cost of co-insurance can add up quickly if you receive expensive care.

Finally, you need to consider whether you prefer certain doctors or hospitals.

If so, you need to make sure to choose a plan whose network includes those providers. Some plans require that you choose from providers in a limited or 'narrow' network, which may not include the ones you prefer.  That means the cost of using your preferred doctor or hospital won't be covered.

However, you can also look for a 'tiered' network plan that gives you access to a larger network of doctors and hospitals but charges higher out-of-pocket costs for the ones that are not in the top tiers.

If you aren't sure which plan best suits your needs, help is available. The Marketplace Exchange and individual health insurers can connect you with a licensed sales agent, a certified application counselor, or a navigator who can help explain not just the cost to buy the plan, but also, and just as importantly, the cost to use it.

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