If your monthly premium went up, you may be wondering whether it's time to switch health plans. A higher premium doesn't automatically mean another plan will save you money.
Before changing plans, compare your monthly premium alongside other costs such as deductibles, copays, coinsurance, prescription coverage, provider networks, and out-of-pocket maximums. The plan with the lowest premium isn't always the least expensive option overall.
Should I switch health plans if my premium went up?
Consider comparing plans if:
- Your premium increased significantly
- Your healthcare needs have changed
- Your preferred doctors or hospitals are no longer in network
- Your prescription costs have increased
- Another plan offers benefits that better match your needs
However, a premium increase alone doesn't necessarily mean switching plans will save money.
What should I compare when my premium increases?
When evaluating whether to keep your current plan or choose a new one, look at the total cost of coverage, not just the monthly premium.
- Premium: The amount you pay each month to maintain coverage.
- Deductible: The amount you pay for covered services before your health plan begins sharing costs.
- Copays: Fixed amounts you pay for certain services, such as doctor visits or prescriptions.
- Coinsurance: The percentage of costs you pay after meeting your deductible.
- Out-of-pocket maximum: The most you'll pay for covered medical expenses during the plan year. After you reach this limit, your plan pays 100% of covered services.
Why a lower premium doesn't always mean lower costs
When comparing health plans, it's natural to focus on the monthly premium. But the plan with the lowest premium isn't always the least expensive option overall.
Consider this example:
| Cost | Plan A | Plan B |
|---|---|---|
| Monthly premium | $450 | $375 |
| Annual premium | $5,400 | $4,500 |
| Deductible | $5,500 | $9,000 |
| Out-of-pocket maximum | $11,000 | $18,000 |
At first glance, Plan B may seem like the better value because it saves you $900 per year in premiums. However, it also comes with a higher deductible and out-of-pocket maximum.
If you don't expect to use many healthcare services, the lower premium may help you save money. But if you regularly visit the doctor, see specialists, take prescription medications, or need ongoing care, your out-of-pocket costs could add up quickly.
That's why it's important to look beyond the monthly premium. Consider your expected healthcare needs and the total cost of each plan, including premiums, deductibles, copays, coinsurance, prescription costs and the out-of-pocket maximum.
Taking the full picture into account can help you choose the plan that offers the best overall value for your situation.
What coverage should you review before switching plans?
Provider network: Verify that your preferred doctors, specialists, hospitals, and health systems participate in the plan's network.
Prescription coverage: Check that your medications are covered and review any changes in costs or pharmacy requirements.
Expected healthcare needs: Think about the care you anticipate using during the next year, including:
- Specialist visits
- Ongoing treatment
- Planned procedures
- Pregnancy or family planning
- Mental health services
Health Savings Account (HSA) eligibility: If you contribute to an HSA, confirm whether the plan is HSA-qualified.
Additional benefits: Some plans may offer extra services such as:
- Virtual care
- Wellness programs
- Care management support
- Travel assistance
- Vision or dental options