Health plans — ugh. My least favorite subject and more than likely your least favorite as well. I’m not sure I’ve met anyone who really likes to talk about them and I’m guessing it’s because most of us, myself included, don’t fully understand them. HMOs, PPOs, POSs, private/government plans, deductibles and co-pays; who has the time or desire to even try to understand all that mumbo jumbo? With all the current changes taking place in health care, it is important to understand the basics so you can pick the plan that’s right for you and your family.
Terminology to Know
Co-payment – The fixed amount a plan requires you to pay for certain services. For example, you might have to pay $10 when you visit your doctor.
Deductible – The fixed amount a plan requires you to pay for medical services before the plan kicks in. For example, you might have to pay the first $200 of a hospital visit before the insurance company starts paying.
Maximum plan dollar limit – The most a plan will pay during a year’s worth of coverage. Plans also have a maximum amount it will pay over the course of your life (lifetime limit).
Premium – The annual amount you pay monthly for your health insurance plan.
Preparing for your Health Plan Search: Key questions to ask yourself.
- How much money can I spend on health care?
This will determine how much you can afford to pay on premiums, deductibles and co-pays.
- What pre-existing conditions do I have?
Certain health problems could make it more difficult to get an individual health insurance plan.
- If I’m over 65, do I want more than the federal senior health plan that assists with paying hospital bills and medical treatment (known as Medicare)?
To help with non-covered expenses of Medicare, you may want to consider a supplemental plan (known as MediGap).
- Do I belong to an organization or work at a business that offers health insurance?
Group insurance is typically cheaper than an individual plan. Some organizations like AARP offer plans.
Types of Health Plans and Providers
A large majority of people in the United States belong to managed care plans because they offer lower co-payments when you use doctors and hospitals that are part of the plan (known as in-network providers). Manage care plans include:
Health maintenance organizations (HMOs) – Except in medical emergencies, these plans require all your medical care to come from providers in the HMO’s network.
Preferred provider organizations (PPOs) – These plans allow you to choose doctors and hospitals outside your network, but you pay more due to higher deductibles and larger co-payments.
– Your primary care physician manages your care in these plans, but you are allowed to choose doctors and hospitals outside your network, but you pay more for their services.
Assessing your Health Plan Options: Key questions to ask your provider.
- How much are the monthly premiums?
- How much of the doctor and hospital bills will the plan cover?
- How much are the co-payments and deductibles?
- Is your choice of doctors and hospitals extremely limited or are there plenty to choose from?
- What happens when you need a doctor after business hours or have to go to an emergency room?
- Are there limits on medical conditions or what the plan will pay for certain medical conditions?
If you are eligible for Medicare, you can get supplemental health insurance (known as MediGap). The National Association of Insurance Commissioners has created 12 standardized MediGap plans for seniors to choose between. Various insurance companies offer the plans, so be sure to ask about MediGap plans when shopping around.
Hopefully, I’ve not lulled you to sleep with this information, but instead empowered you with this knowledge to ask questions and take charge of your health plan.
For more information or help finding a health plan, contact:
U.S. Agency for Healthcare Research and Quality
National Association of Insurance Commissioners
Research & Community Education