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The ABCs of Health Insurance
This mini-guide will explain the basics of your health care insurance options and give you some smart suggestions for evaluating and selecting a plan that's right for you.
Selecting a health insurance policy is a matter of balancing the cost of a plan with the amount of coverage you need and the degree of choice you want.
What's it going to be?
This mini-guide will explain the basics (the difference between HMO and PPOs, for starters) and give you some smart suggestions for selecting a plan that's right for you or evaluating the plan offered by your employer.
What's the difference?
While your employers may offer you this kind of traditional plan, the majority of health care plans available to consumers are managed care plans, in which members are served by specific networks of doctors and hospitals. Managed care is a relatively new system in the United States. It was designed with the intention of managing the rising costs of health care in this country and, at the same time, to regulate the care you receive. There are three major types of managed care plans: HMOs, PPOs, and POS plans.
All employers with more than 25 workers are now required by federal law to offer an HMO plan to its employees. The main differences between managed care options-HMOs, PPOs, and POS plans-are the freedom of choice of providers and the amount of "gatekeeping" there is to specialty services. Let's take a closer look at the options.
HMO Plans HMOs, which stands for Health Maintenance Organizations, are prepaid health plans that provide services within one physician/hospital network. HMOs give members a list of doctors from which to choose a primary care physician. This doctor coordinates your care, which means you generally must contact him or her to be referred to a specialist. If you receive care from a network doctor, you are charged only a co-pay for each visit, usually $5 or $10. If you receive care without a primary care doctor's referral, or obtain care from a non-network member, you receive no reimbursement. HMOs are the most restrictive managed care plan, but they often have the lowest premiums.
PPO Plans A PPO, or Preferred Provider Organization, contracts with various doctors and hospitals in the community. Unlike an HMO, you may choose to see a doctor who is not included in the plan, in which case you have to meet your deductible and pay coinsurance based on higher charges.
POS Plans Many HMOs offer an indemnity-type option called a POS, or point-of-service, plan. A POS plan is like an HMO in that enrollees are assigned to a primary care doctor within the POS network. But like a PPO, POS enrollees can go out of the network for medical care by paying a larger share of the cost.
What's the same?
Most plans provide basic preventative health care coverage,
but the details are what counts. The best plan for someone
else may not be the best plan for you. For each policy you
are considering, find out how it handles these
Weighing your options
After you review what benefits are available, you can compare plans. You should consider several factors: choice, services, trade-offs, quality, and customer satisfaction.
What if you have a complex medical problem or multiple medical problems? Having easy access to specialists is important, even if you are healthy right now. Each plan may differ in its requirements for seeing a specialist. Some doctors in a managed care plan refer only to specialists within the plan, but many allow referrals outside the network in rare circumstances. In other plans, you simply have to pay more to see an outside specialist.
Assessing the quality of managed care plans is still a new field. No one has all the answers, but several indicators of quality can help in your decision.
Customer satisfaction surveys allow you to judge quality based on many people's experiences. Most managed care plans routinely use surveys to learn if patients are satisfied with the plan's overall performance, in addition to the success of specific services, such as phone service. How pleased the membership is with the plan is a good indication of how satisfied you will be. You can request to review such surveys from the insurance company.
Questions you should ask
Finally, here's a list of questions that you should ask of any plan.
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