How to Compare Health Insurance Plans Side by Side
A practical guide to the five key health insurance numbers, how to calculate your worst-case annual cost, and how to pick the right plan for how you actually use healthcare.
Learn the Five Key Numbers
Every health insurance plan is defined by five financial numbers. Premium is what you pay every month whether you use any medical services or not. Deductible is the amount you pay out of pocket before insurance begins covering costs. Copay is the fixed dollar amount you pay for a specific service like a doctor visit.
Coinsurance is your percentage share of costs after you meet your deductible. If your coinsurance is 20%, you pay 20% and the insurance pays 80% of covered services once you have met your deductible. The fifth number is the out-of-pocket maximum, or MOOP — the most you will pay in a year before insurance covers 100% of covered costs.
Understanding these five numbers for each plan you are comparing is the starting point for any honest comparison. A plan that looks attractive based on premium alone may have a very high deductible or coinsurance rate that dramatically increases your costs when you actually need care.
Calculate Your Worst-Case Annual Cost
The worst-case annual cost of a health insurance plan is the annual premium plus the out-of-pocket maximum. This is the most you can possibly pay in a given year for covered services if you have significant medical needs.
For example, if Plan A has a $450 monthly premium and a $6,000 MOOP, your worst-case annual cost is ($450 times 12) plus $6,000, which equals $11,400. If Plan B has a $350 monthly premium and a $9,000 MOOP, the worst-case is ($350 times 12) plus $9,000, which equals $13,200. Plan B has a lower premium but a higher worst-case cost because of the higher MOOP.
Comparing worst-case annual costs levels the playing field between high-premium and low-premium plans. The plan with the lower worst-case annual cost protects your finances better in a bad year, even if it costs more monthly in a good year.
Match the Plan to How You Use Healthcare
Your personal healthcare usage pattern is the most important factor in plan selection. If you are generally healthy and rarely need medical care beyond an annual checkup, a high-deductible health plan with a low premium may cost you less annually in a typical year, even though the worst-case scenario is higher.
If you have ongoing medical needs — regular prescriptions, specialist visits, physical therapy, or a chronic condition — a plan with a lower deductible and lower coinsurance is likely worth the higher premium. Model your actual expected medical expenses under each plan to see which produces the lowest out-of-pocket cost at your typical usage level.
Prescription drug coverage varies significantly between plans. If you take regular medications, check the drug formulary for each plan — the list of covered drugs and their tier levels. A medication in tier one might cost $10 copay on one plan and $75 on another. Over a year, that difference can exceed the premium difference between plans.
Check Your Doctors Are In-Network
Before selecting any plan, verify that your primary care doctor, any specialists you see regularly, and your preferred hospital are all in the plan's network. Receiving care from an out-of-network provider typically means much higher cost-sharing or no coverage at all, depending on the plan type.
HMO plans require you to use in-network providers for all non-emergency care and typically require referrals from a primary care physician to see specialists. EPO plans also restrict you to in-network providers but may not require referrals. PPO plans offer the most flexibility with both in-network and out-of-network coverage, though out-of-network care costs significantly more.
Network adequacy varies by plan and geography. In urban areas, most plans offer broad networks. In rural areas, some networks may be quite narrow, limiting your access to specific hospitals or specialists. If access to a particular specialist or facility matters to you, confirm network status before purchasing.
Make the Final Decision
Once you have calculated worst-case annual costs, modeled your expected usage under each plan, and confirmed your doctors are in-network, compare the results side by side. The right choice balances the likely best-case cost in a healthy year against the protection offered in a worse year.
If you are choosing between plans and the difference in worst-case annual cost is small — within $500 or $1,000 — the plan that covers your providers and preferred pharmacy and has the simpler structure is often the better practical choice. Complex plans with many tiers, per-visit fees, and confusing coinsurance schedules create administrative burden that simpler plans avoid.
If your employer contributes to a Health Savings Account with a qualifying high-deductible plan, factor that contribution into your analysis. A $1,500 employer HSA contribution effectively reduces the cost of a high-deductible plan by $1,500, which can meaningfully change the comparison outcome.