Comparing Health Insurance
[When comparing health insurance, be sure that you clearly understand the total annual potential out-of-pocket amount. Otherwise your comparison may be way off the mark. - ed.]
5. How Do I Compare Health Plans?
After you review what benefits are available and decide what is important to you, you can compare plans. Many things should be considered. These include services offered, choice of providers, location, and costs. The quality of care is also a factor to think about (go to section 6.).
[When comparing health insurance, the "quality of care" is important for a pre-paid plan and some HMO's. For a PPO, it is usually irrelevant except for small isolated towns, because the PPO network may well include more than half the physicians and facilities in your area and in the entire state. - ed.]
Services
Look at the services offered by each plan. What services are limited or not covered? Is there a good match between what is provided and what you think you will need? For example, if you have a chronic disease, is there a special program for that illness? Will the plan provide the medicines and equipment you may need?
[In many states, if you have a significant "chronic disease", you may not qualify for individual coverage, or it may be excluded by exclusion rider, so comparing health insurance on that basis will be fruitless. A government high risk pool program may be the only coverage available outside employer coverage. - ed.]
Find out what types of care or services the plan won't pay for. These usually are called exclusions.
[When comparing health insurance, also consider any limitations, e.g., maximum number of days or visits, maximum payable per year, etc. -ed.]
Few indemnity and managed care plans cover treatments that are experimental. Ask how the plan decides what is or is not experimental. Find out what you can do if you disagree with a plan's decision on medical care or coverage.
Health Insurance Choice
What doctors, hospitals, and other medical providers are part of the plan? Are there enough of the kinds of doctors you want to see? Do you need to choose a primary care doctor? If you want to see a specialist, can you refer yourself or must your primary care doctor refer you? Do you need approval from the plan before going into the hospital or getting specialty care?
[The more rules of this kind that there are, the less the plan should cost, for comparable benefits, i.e., the rules should be reducing unnecessary claims or treatment costs to some degree. - ed.]
Location
Where will you go for care? Are these places near where you work or live? How does the plan handle care when you are away from home?
["Away from home" means being outside the network or service area. When comparing health insurance, consider how much you are likely to travel. With many plans, but not all, you can be in-network in most if not all other states. - ed.]
Compare Health Insurance Costs
No health insurance plan will cover every expense. To get a true idea of what your costs will be under each plan, you need to look at how much you will pay for your premium and other costs.
- Are there deductibles you must pay before the insurance begins to help cover your costs?
- After you have met your deductible, what part of your costs are paid by the plan?
- Does this amount vary by the type of service, doctor, or health facility used?
- Are there copayments you must pay for certain services, such as doctor visits?
- If you use doctors outside a plan's network, how much more will you pay to get care?
- If a plan does not cover certain services or care that you think you will need, how much will you have to pay?
- Are there any limits to how much you must pay in case of major illness?
- Is there a limit on how much the plan will pay for your care in a year or over a lifetime? A single hospital stay for a serious condition could cost hundreds of thousands of dollars.
You can't know in advance what your health care needs for the coming year will be. But you can guess what services you and your family might need. Figure out what the total costs to your family would be for these services under each plan.
[Guessing what services may be needed is probably of more use when comparing health insurance options in employer provided coverage rather than buying individual coverage. - ed.]
Next - Health Insurance Quality Return to Contents - Health Insurance
[If you are in good health, "what you think you will need" in medical care, is a mere guess. What you need is good financial protection against the unexpected. When comparing health insurance, bear in mind that the purpose of insurance is to protect against the unexpected, not to pay for what you expect to need. - ed.]