# SureChoice: Making Informed Insurance Decisions

Health insurance is confusing. Last year, after Annie and I got married and she started a new job, she came home from orientation day with the book. The book of health insurance plans, complete with overcomplicated tables of costs and percentages, interspersed with pictures of smiling people. I assume they’re smiling either to make me — the daunted reader — feel assured, or because they know they’d be screwed in the U.S. without health insurance. But that’s another issue.

## Choices, Choices

The problem with displaying a health insurance plan using many tables is that it’s very difficult to make comparisons between plans. One plan might be more costly than another in certain categories but not in others. One might have a low deductible while the other has a high co-pay. Yet a third plan might have a very middling premium and comes with a Flexible Savings Account. Even if I know what all these terms mean and how they interact with one another, it’s still hard to discern which would be best for our family’s specific health needs. And, to top it all off, I can’t know if I’m getting a good deal since insurance rates are negotiated between insurance companies and employers, and there’s very little info available online to compare with.

This, I think, is where uncertainty sets in and some word-of-mouth advice can end up replacing mathematical reasoning for some people. (Or, for those who grew up in the 2000s, maybe you have a vaguely negative feeling about HMOs because of Melman from Madagascar.) But Annie and I wanted grounded answers, so we went to our whiteboard, scribbled a ton of math and graphs, argued about said scribbles, eventually came to realize we agreed about everything we were arguing over (classic), and got to work.

## Cutting Through the Jargon

A big part of this for me was simply understanding what all these health insurance words meant. Here’s what I learned (feel free to skip if you know this already).

• A premium is a cost you pay every month just for being on insurance. Think of it like the cost of a Netflix subscription, but more expensive and way less entertaining.
• A deductible is a set amount of medical costs that you are 100% responsible for. Insurance is only going to kick in and make things cheaper after you “meet” your deductible.
• A copay (co-payment) is the percentage of medical costs you’re responsible for after your deductible is met.
• An out-of-pocket maximum is the maximum amount of money you will be responsible to pay in a year.

Let’s work this as an example. Say I have Plan A, shown below.