How to Choose Health Insurance in 6 Steps
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Choosing a health insurance plan that's a good value can be easy with these six steps. Pick the best option by comparing costs, thinking about your health needs and narrowing down your options based on the plan details.
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1. Choose the type of health insurance plan
Start by finding out which types of plans are available to you. If you're eligible, choose a plan through your job, Medicaid or Medicare. Otherwise, shop on HealthCare.gov.
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Employer health insurance:
- Available to most full-time workers
- Usually the cheapest option
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Marketplace plans on HealthCare.gov:
- Full-benefit plans sold by private insurance companies
- Most people qualify for discounted rates based on their income
Choosing a health insurance plan from an employer
Most people get health insurance through their job, which usually provides the best coverage at the cheapest price.
Your choices will be limited to the set of options that your employer offers. This is typically a few plans from the same insurance company.
- Compare coverage based on your medical needs
- Check which doctors are in the network
- Decide between a low-cost HMO or the flexibility of a PPO
If health insurance through your job is not affordable or does not provide basic coverage for medical care, compare your job-based insurance to a marketplace plan to decide which is the best deal.
Choosing a marketplace health insurance plan
If health insurance isn't available through your job, shop for plans on HealthCare.gov or your state marketplace.
Through the online portal, you can see all of the plans offered in your ZIP code to start comparing companies, coverage and costs.
Marketplace plans are also called "Obamacare" or Affordable Care Act (ACA) plans.
- You can sign up during open enrollment, which is from Nov. 1 to Jan. 15 in most states.
- You can sign up any time of the year if you have special circumstances such as moving, a change in family size or losing other health insurance coverage.
In many cases, how much you pay for health insurance will be based on your income. A subsidy calculator can let you know how much you can save.
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2. Decide how much coverage you need
Most people choose a middle-of-the-road plan that balances the cost of insurance with its coverage for medical expenses.
The level of coverage that's the best value depends on how much medical care you need.
- If you expect to need expensive medical care, it's usually worth it to pay more for a better health insurance plan. This means you'll pay less at the doctor and have a lower cap on your medical spending. For example, if you need surgery or are having a baby, paying for a plan with better coverage will likely save you money overall.
- If you're young and healthy, or you don't need much medical care, it's usually a better deal to get a cheaper health insurance plan. These plans still cover the main medical services, but you'll pay a larger portion of your medical costs. This will save you money in a typical year. And if you get really sick, you'll still have the benefits of health insurance, such as a cap on your medical expenses.
Comparing coverage on the health insurance marketplace
On HealthCare.gov or a state marketplace, coverage options are grouped into different levels called metal tiers. This can make it easier to choose a health insurance plan because you can tell roughly how much coverage each plan has.
Bronze
- Cheap rates and good coverage for preventive care
- High deductibles mean you could have to spend thousands of dollars before the plan starts paying for most of your health care
- Free preventive care even if you don't meet the deductible
Silver
- Middle-of-the-road plan that balances your monthly costs with its medical coverage
- A good choice for most people with typical health needs
Gold
- Gives you the cheapest medical care and prescriptions
- Expensive monthly rates that are only worth it if you have chronic health conditions or need expensive medical treatment
Employer plans can have similar benefit levels to marketplace plans, but you usually won't have the metal tiers to help you classify them.
Health insurance coverage tip: Plans usually cover most types of common health costs such as doctor appointments, prescriptions and emergency care. However, if you need specialized care such as weight-loss surgery or a vasectomy, check the plan details to see which will give you coverage.
3. Compare doctors, medical facilities and prescriptions
Choose a health insurance plan that covers your local hospitals and favorite doctors.
Health insurance plans will have a list of in-network doctors and hospitals. Depending on the health insurance plan type, you might only be covered in the network, or you may have some coverage at any doctor but better coverage for in-network doctors.
You can ask your doctor which insurance companies they work with.
Choose a plan that gives you convenient access to medical care, including any specialists you regularly see. Also, choose a plan that covers the specific prescriptions you take. This can help you stay with the exact medication that works for you, rather than having to switch to something similar.
- For employer plans, the list of doctors and prescriptions is usually available through your human resources department or the health insurance company website.
- If you're shopping on the marketplace, you can enter your doctor's name and your prescriptions into HealthCare.gov's plan comparison tool to find the best company.
4. Choose a health insurance company
Most people look at costs and star ratings to find a health insurance company that is both high quality and affordable. The company you select can affect how easy it is to use your insurance, the quality of the customer service and how much you pay.
Company |
Editor's rating
| Monthly cost |
|---|---|---|
| $507 | |
| $516 | |
| $587 | |
| $622 | |
| $631 | |
| N/A |
Average monthly cost for a 40-year-old buying a Silver health insurance plan. Company's costs and ratings vary by location.
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5. Pick the best network type for your plan
The type of insurance plan affects your costs and access to medical care. HMOs and PPOs are the two most popular types of plans.
There are trade-offs between the two options, and you'll have to decide if it's worth it to you to pay more for the flexibility of a PPO.
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HMOs are budget-friendly plans that are usually cheaper but have more restrictions.
HMOs are good if you're looking for more affordable coverage and are willing to follow the plan's stricter rules. For example, you'll need a referral from your primary doctor before seeing a specialist. And you'll pay the full cost of medical care when the doctor isn't in your plan's network (except in emergencies when you'll have coverage anywhere).
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PPOs are more flexible health insurance plans that usually cost more.
PPOs are good if you need frequent specialist care, are managing chronic health conditions, travel frequently or want flexibility in your choice of doctors.
With a PPO, you'll have coverage for both in-network and out-of-network doctors, though it's usually cheaper to stay in-network. This gives you more freedom about where you get your medical care. You can also make an appointment directly with a specialist without needing a referral.
Other types of plans, such as EPOs and POS plans, are sometimes available, but they're less common.
6. Look for any extras that tip the scales
Benefits like gym memberships, acupuncture and healthy living rewards can tip the scale as to which health insurance plan is the best value.
Always consider your main medical benefits first. You don't want to let a $100 perk outweigh your coverage for expensive things like surgery or prescriptions.
However, if you're making your final choice between a few good options, the extra benefits can help you decide. Some examples include:
Company | Perks |
|---|---|
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| UnitedHealthcare (UHC) has fitness programs where you can earn rewards for meeting health goals. |
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| Aetna sometimes has discounts for health and wellness products at CVS, its parent company. |
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| Blue Cross Blue Shield (BCBS) has the Blue365 program with discounts for a wide set of products including vitamins, eye exams and fitness gear. |
Help is available if you're struggling to choose a health insurance plan
- HealthCare.gov advisors are available 24/7 to answer your questions and help you compare plans or enroll in coverage. Call 1-800-318-2596 (TTY: 1-855-889-4325).
- Agents and brokers can help you choose marketplace plans or find other types of insurance. Find someone nearby with HealthCare.gov's directory.
- The benefits manager at your job can also help you understand your plan options and answer questions about coverage.
Frequently asked questions
What's the biggest mistake you can make when choosing health insurance?
The biggest health insurance mistake you can make is not choosing a plan during open enrollment. You may not be able to sign up for health insurance after open enrollment, which could mean you'd have to pay the full cost of your medical bills and prescriptions, and miss important benefits of health insurance like free preventive care.
Which health insurance company should I choose?
The best health insurance companies include Kaiser Permanente, Blue Cross Blue Shield and UnitedHealthcare. However, rates and quality can vary based on where you live, so be sure to compare the options in your state.
How do you choose a health insurance plan from an employer?
Compare the levels of coverage for the health insurance plans that your job offers. Most people should get a midtier plan that balances the cost of the plan with its medical coverage. If you're relatively healthy, the best deal is a cheap health insurance plan where you pay a larger portion of your medical costs. Those who need expensive medical care or who have chronic illnesses should choose the most comprehensive coverage that's available.
Methodology
The costs of health insurance plans are based on aggregated data from the Centers for Medicare & Medicaid Services (CMS) and state marketplaces for 2025 private health insurance plans. Rates are for a 40-year-old choosing a Silver health insurance plan.
Company rankings are based on customer satisfaction, affordability, the quality of medical care and the rate of complaints. Data sources include the National Association of Insurance Commissioners (NAIC), AM Best and the National Committee for Quality Assurance (NCQA).
Editorial note: The content of this article is based on the author's opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.