Choosing a health insurance plan that is right for your family can be a bit daunting...but it doesn't have to be. Becoming familiar with the different health insurance plans that are available both for individuals and families will help you navigate the health care insurance field and make an better informed decision concerning health insurance. Read on to learn some of the health insurance basics.
HOW TO CHOOSE THE BEST INSURANCE PLAN FOR YOUR NEEDS
First, determine if short term or long term health insurance is what you need. If you are unemployed, yet hope to be hired in a few months with a company that offers group insurance, than perhaps short term health insurance is for you. Also some companies require a new employee to work for three to six months before they are eligible for health benefits. Short term could offer the temporary coverage you need. Next, decide if basic health-care coverage or comprehensive health care coverage will better meet your needs.
BASIC HEALTH CARE COVERAGE
This plans covers inpatient hospitalization and out-patient surgery in case of a major accident or illness. The monthly health premiums are lower and are generally the choice for those who are primarily interested in coverage in case of severe accident or illness.
COMPREHENSIVE HEALTH CARE COVERAGE
This plan covers preventative care, Dr's visits, prescriptions, along with hospitalizations and out-patient surgery. Comprehensive health care coverage has a higher monthly premium, and it generally has a low co-pay at the time of a Dr's appointment. This plan may be the better choice appropriate for those who have reoccurring medical expenses.
AVAILABLE INDIVIDUAL AND FAMILY INSURANCE PLANS
Health care plans usually fall into two categories, indemnity or managed-care plans. They differ in regard to how bills are paid, ability to choose health care providers and out-of pocket expenses. Generally, you'll have a broader choice of health care providers with indemnity health-care plans and less out-of -pocket expenses and less paperwork with a managed-care health insurance plan.
MANAGED CARE PLANS
HMO's (Health Maintenance Organizations), PPO's
(Preferred Provider Organizations), and POS's (Point of Service Plans) are all managed health-care insurance plans.
INDEMNITY PLANS
Under this plan, insurance companies pay their share of the cost for services after they receive a bill. This may mean that you will have to pay your bill for medical care at the time of service and then seek reimbursement from your health insurance company.
WHAT ARE SOME OF THE ADVANTAGES AND DISADVANTAGES OF AN HMO PLAN?
- Lower out of the pocket expenses
- Fewer choices in regard to physicians and hospitals than other health insurance plans
- A PCP (Primary Care Physician) is required and will meet most of your health-care needs
- A referral is needed from your PCP before seeing a specialist
WHAT ARE SOME OF THE ADVANTAGES AND DISADVANTAGES OF A PPO PLAN?
- Health insurance companies offer a network of preferred doctors and hospitals
- These health care providers offer the members services at discounted rates
- Usually an annual individual or family deductible must be paid before the health insurance companies begins to pay out money for medical bills.
WHAT ARE THE ADVANTAGES AND DISADVANTAGES OF A POS?
- Combines features of both the HMO and PPO plans
- Members are usually required to choose a Primary Care Physician (PCP)
- PCP services are not usually subject to a deductible
- Preventative care visits are generally covered
HEALTH INSURANCE TERMS
As with any genre, health care insurance is filled with jargon exclusive to its field. The following is a list of terms and their meanings that will hopefully give you good grasp of health insurance terms.
COINSURANCE
The percentage of medical costs you have to paying after meeting the deductible amount that is attached to your plan.
CO-PAYMENT
This occurs under an HMO plan and requires a specified dollar amount be paid to the health insurance provider on each visit.
COVERED BENEFITS
A covered benefit must always be a medical necessity. The determination of whether something is a medical necessity or not is made by the health insurance company.
DEDUCTIBLE
The amount you must pay in medical expenses before your insurance company will begin to cover your medical bills.
DEPENDENT
A dependent is someone other than yourself who is covered under your health insurance plan. This could include a spouse, child, unmarried partner. For children there are age limits at which they are no longer covered under a parent's health policy.
DISABILITY
In the event that you are unable to work for an extended period of time due to an injury or a medical condition, disability insurance provides funds to cover your living expenses in a specified amount.
GATEKEEPER
Another title for your Primary Care Provider (PCP)
GROUP INSURANCE
Employers often offer group insurance plans. Under group insurance an employee can generally obtain a much more affordable plan.
IN NETWORK/OUT OF NETWORK
In network refers to those physicians who have been contracted under a health care plan to provide services to their members. Staying in network allows lower charges and a smaller percentage of out of pocket expenses. Conversely, going out of network generally means charges are higher and you will have to pay a greater percentage of out of pocket expenses.
GRACE PERIOD
This is a specified period past the due date of a premium during which coverage may not be canceled. This prevents health insurance companies from canceling your policy if payment should arrive a few days late.
OPEN-ENROLLMENT PERIOD
Generally, this is a once-a-year period of time that allows you to make changes to your existing health insurance coverage. (A change in marriage status or the birth of a child also allows you to modify your health insurance plan.
PRE-CERTIFICATION(Pre-authorization)
Before surgery or hospitalization, the insurance company must be contacted to get approval for a medical service to take place. Failure to do so typically means the insurance company will NOT pay for the service. This does not apply in an emergency situation, although the insurance company should be contacted as soon as possible.
PRE-EXISTING CONDITION
A medical condition that existed before an insurance policy became effective. Most insurance companies require a three month to one year waiting period before a pre-existing condition can be covered under their plan.
PREMIUMS
Monthly payments for insurance coverage. Monthly payments can easily reach $100 for singles and two to three times that amount for a family.
REFERRAL
A written form from your Primary Care Provider to another Dr. (usually a specialist) giving consent for you to go to them for medical services.
SECOND SURGERY OPINION
On occasion an insurance company will ask you to be seen by a second Dr. to determine if the recommended procedure is necessary or if an alternate method could accomplish the same result.
URC (Usual, reasonable, and customary)
URC refers to the dollar amount an insurer will usually pay for a service or procedure based on what is customary for the area in which you live. An insurance company will not pay $800 for a procedure that costs only $300.
