Chelsey Tucker graduated with a Bachelor of History degree from Metropolitan State University in 2019. She now writes about insurance with her specialty being life insurance and has been quoted on Help Smart Phone and MEL Magazine.

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years. He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com.

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Mar 19, 2020

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The lowdown...

  • A buy-up plan usually offers better coverage than basic plans
  • A buy-up plan has lower out-of-pocket expenses
  • Standard health insurance plans tend to have smaller physician networks 

If you have coverage through your employer, you may be offered a buy-up plan when it’s time to renew your health insurance. At this point, you’re probably wondering what buy-up health insurance is. To help you make the best choices for yourself, and your family, if applicable, answers to commonly asked questions about buy-up health plans are explained below.

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What’s the difference between a standard and buy-up health insurance plans?

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If your employer is offering you a buy-up plan for your health insurance, they are likely offering a standard or base plan as well. Employers may pay for a portion or all of the base medical insurance plan. If you have the ability to add to the base plan by bettering the coverage and increasing the premium, you’re being offered a buy-up plan.

A buy-up plan provides better coverage than base choices. Usually, both options are offered by the same insurance company, but the buy-up plan offers benefits that aren’t available with the standard plan.

For example, in a buy-up plan, copays, deductibles, and co-insurance are less than the standard plan. Other benefits that may be offered in a buy-up plan include dental and vision policies.

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Are buy-up plans more expensive than regular health insurance?

In general, a buy-up plan will cost you more in premiums but could save you more money in regards to out-of-pocket cost. For example, if you have a standard plan with a $40 office copay, it may only be $25 if you opt for the buy-up plan. That’s a savings of $15.

You’ll also likely pay less for co-insurance, prescriptions, have a lower deductible, etc. Most buy-up plans also allow enrollees to choose from a larger pool of in-network physicians and facilities.

How to Determine if the Buy-Up Plan is Right for You

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If you’ve been offered a buy-up plan, you’re probably wondering how to tell if this coverage is right for you, or if standard coverage will cover your medical costs?

As with most decisions that affect your life, it’s important to make the decision to buy up or not with careful consideration. If you want to make the best decision for your healthcare, you’ll need to:

  • Take stock of your health needs
  • Evaluate the physicians and facilities offered in each plan
  • Make sure you understand what services and treatments are available in each plan
  • Compare premium expenses vs. potential out-of-pocket costs if you don’t buy-up

Consider Your Health Care and Medical Treatment Needs

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When considering whether to buy up or not, you need to take stock of your health care and medical treatment needs. If you are adding your spouse or dependents to your insurance, you should consider everyone’s needs at the same time. Next, think about any potential needs you or any dependents may have during the next year.

If you don’t anticipate needing any more medical services than you did the previous year, you may not need to buy up.

Under the Affordable Care Act, preventative services are free, so those services will not cost you more if you don’t buy-up. However, you should keep emergencies, injuries, and accidents in mind when choosing health insurance for the next year.

For instance, if you or one of your dependents needs emergency surgery to remove a gallbladder or appendix and your hospital coverage leaves you with high co-insurance, you may end up owing tons of money to the hospital. In comparison to what the premiums would have been if you bought up, you’d be saving money by buying up before an unexpected medical event occurred.

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Evaluating Network Size of Different Plans

The next step in determining whether you should buy up or not is to evaluate the physician network of each plan. Start with primary care doctors and then check specialties that you or anyone that will be covered under your plan may need to see. Some of the most popular specialties to consider include:

  • Ear, Nose, and Throat
  • Gynecology/Obstetrics
  • Physical Therapy
  • Chiropractors
  • Sports Medicine
  • Orthopedics

If you’re established with a primary care physician or a specialist, look to see if they are covered under both options. Visiting a doctor that is out-of-network can cost thousands of dollars in out-of-pocket costs. If your base plan doesn’t offer a good selection of covered physicians and facilities, it’s important to see if the buy-up plan does.

If the more expensive option offers better coverage to the doctors you already see or specialists you may need to see in the future, it may be a wiser decision choose the buy-up plan to reduce out-of-pocket costs.

On the same thought, if all of the physicians you currently see and may need to see in the future are covered by the base plan network, it might not make sense for you to pay more expensive premiums.

Understanding the Limits of the Buy-Up and Base Plan

Lastly, you’ll want to make sure you have a good understanding of the buy-up and base plans. Specifically the limitations of each plan. For example, bariatric surgery is an elective procedure. Insurance companies in different states treat this type of procedure differently.

In general, buy-up options offer better coverage for medical services, but don’t necessarily provide better coverage for elective procedures.

Knowing what the limitations are of each plan will help you from being disappointed. It also gives you plenty of time to adjust your finances and even consider a health-savings account, if necessary.

How to Find the Limitations of Different Health Insurance Plans

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When you want to know the limitations of different health insurance plans, you need to look at plan documents. If you don’t have access to the plan documents, but know what insurance company your employer is working with, you can call the insurance company directly to find out what types of services are covered under each plan.

If your out-of-pocket expenses usually come from prescription costs, you should check each plans formularies. Pharmacy formularies list what prescriptions are covered. In general, if a medication isn’t listed on the formulary, it isn’t covered.

In addition to lists of medicines, the formulary will also list co-pay amounts for different tiers. If your maintenance prescriptions are available on the buy-up plan at a lower cost than the base plan, you should consider buying up to save money on out-of-pocket expenses.

In addition to lists of medicines, the formulary will also list co-pay amounts for different tiers. If your maintenance prescriptions are available on the buy-up plan at a lower cost than the base plan, you should consider buying up to save money on out-of-pocket expenses.

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Compare Premium Costs for Both Plans

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Now that you’ve considered all of the factors above, you need to compare premium costs for the buy-up plan versus the standard plan. Specifically, you want to know what your premiums will cost you on a monthly basis. It’s also important to consider costs you will have to pay with each plan including:

  • Copays
  • Coinsurance
  • Deductible Amounts

Ultimately what you’re looking for is an inverse relationship between your monthly premiums and the out-of-pocket costs you may experience. If you buy-up, your premiums should be less than the amount of money you would spend in copays, co-insurance, and deductibles with the standard plan.

You also need to make sure you have enough insurance to cover you in the case of unexpected health expenses. If you predict that you will need more medical care in the upcoming year than you did in the previous year and aren’t aware of what the extra costs may be, a buy-up plan is likely a wise decision.

If you predict that you will need more medical care in the upcoming year than you did in the previous year and aren’t aware of what the extra costs may be, a buy-up plan is likely a wise decision.

When you are offered a buy-up plan vs. a standard plan, you are making a decision for the next year only. What this means is you will not be able to change your plan for 12 months, but you aren’t locked into it forever. If you feel like you didn’t make the best decision for yourself and your family, you will likely have a chance to buy up the next year.

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