Choosing Health Insurance
[You may find that choosing health insurance is best done with the help of someone familiar with various insurers and currently available plans. Choosing health insurance can be confusing and frustrating. However, an insurance licensee who specializes in health insurance and deals with many health insurance companies is going to have a lot of experience with the process of choosing health insurance. - ed]
Choosing a Plan
1. What Are My Health Plan Choices?
Choosing between health plans is not as easy as it once was. Although there is no one "best" plan, there are some plans that will be better than others for you and your family's health needs. Plans differ, both in how much you have to pay and how easy it is to get the services you need. Although no plan will pay for all the costs associated with your medical care, some plans will cover more than others.
Almost all plans today have ways to reduce unnecessary use of health care—and keep down the costs of health care, too. This may affect how easily you get the care you want, but should not affect how easily you get the care you need.
Plans change from year to year, so you should carefully consider each plan, using the questions outlined in this booklet. If you get health insurance where you work, you should start with your employee benefits office. Its staff should be able to tell you what is covered under the plans available. You can also call plans directly to ask questions.
Choosing Health Insurance Plan Types
Health insurance plans are usually described as either indemnity (fee-for-service) or managed care. These types of plans differ in important ways that are described below. With any health plan, however, there is a basic premium, which is how much you or your employer pay, usually monthly, to buy health insurance coverage. In addition, there are often other payments you must make, which will vary by plan. In considering any plan, you should try to figure out its total cost to you and your family, especially if someone in the family has a chronic or serious health condition.
Indemnity and managed care plans differ in their basic approach. Put broadly, the major differences concern choice of providers, out-of-pocket costs for covered services, and how bills are paid. Usually, indemnity plans offer more choice of doctors (including specialists, such as cardiologists and surgeons), hospitals, and other health care providers than managed care plans. Indemnity plans pay their share of the costs of a service only after they receive a bill.
Managed care plans have agreements with certain doctors, hospitals, and health care providers to give a range of services to plan members at reduced cost. In general, you will have less paperwork and lower out-of-pocket costs if you select a managed care type plan and a broader choice of health care providers if you select an indemnity-type plan.
Over time, the distinctions between these kinds of plans have begun to blur as health plans compete for your business. Some indemnity plans offer managed care-type options, and some managed care plans offer members the opportunity to use providers who are "outside" the plan. This makes it even more important for you to understand how your health plan works.
Besides indemnity plans, there are basically three types of managed care plans: PPOs, HMOs, and POS plans.
Next - Indemnity Health Insurance Return to Contents - Health Insurance
[When choosing health insurance, most people buy a form of managed care because of the premium cost savings. You may also want to compare carefully how much is saved each month by accepting more annual out-of-pocket expense when choosing health insurance. The initial interest of many people when first choosing health insurance is to find the plans with the smallest copays and lowest deductibles. However, after seeing the monthly premium cost, especially for older age brackets, the insurance buyer usually finds that it is more economical in the long run to select much higher out-of-pocket exposure when choosing health insurance. - ed.]