Finding the right health insurance plan is about as easy as finding the right car – each one seems to have an endless supply of options. Just as you do when buying a new car, you’re trying to find the health insurance plan that you will get the most mileage – pun intended – out of.
There are many important factors that play into your decision, and having the right information at your fingertips is paramount.
What you need to know first and foremost is the difference between the two primary types of plans you can enroll in for health insurance.
The first is a health management organization (HMO), which gives patients health coverage within a network of doctors. A client will choose a primary care physician as his or her regular doctor, and this individual will refer the client to specialists if needed.
These plans can have restrictions – most notably is that a client will have to pay more money to see a preferred doctor if they aren’t part of a particular HMO network.
However, if you don’t mind seeing the doctors in an HMO’s network, this option will be pretty cheap.
The second basic, most common plan is the preferred network organization, which is a health plan that contracts medical providers to create a network of participating providers. This option, provides more flexibility to a client, but also come with higher copays and various costs.
The tradeoff is obvious: a wide selection of doctors, but also some of the highest premium costs among health insurance plans.
Outside of the basic plans listed above, there is a plethora of options for you to choose from.
An exclusive provider organization is the same thing as an HMO, but instead of just a regional network, it operates on a national scale.
The point-of-service plan allows you to see an out-of-work physician within a certain network. It is somewhat of a hybrid of HMO and PPO plans. Clients choose a primary care provider within a certain network, like an HMO.
However, like a PPO, clients can also go outside the network for a preferred physician.
A high-deductible plan, also known as the safety net plan or the catastrophic plan, is exactly what it sounds like. It acts as a sort of failsafe, giving low-premium costs for people who can’t afford or don’t need to see a doctor regularly.
The deductible for this plan is usually very expensive, but if you pass a certain threshold, your coverage will apply 100 percent. It’s certainly a risk-reward situation.
As you’re shopping around for health insurance, it’s easy to be overwhelmed by the sheer amount of information. Being unfamiliar with the terms associated with health insurance can make the process downright unbearable.
There are a few basic terms you should know before venturing into the world of health insurance.
In some health insurance plans, like the PPO, your insurer doesn’t pay your whole medical bill. You pay whatever they don’t pay, and this is called coinsurance.
There is a government program called COBRA that gives workers and families who lose their health benefits the right to choose to continue group health benefits. These benefits can be provided by group health plans for limited amounts of time, due to job loss, death, reduction in hours and other life events.
Copay, a term you’ll hear quite often, is short for copayment. Each insurance plan will usually require that you spend $10 to $50 when you visit the doctor. In most cases, you can apply your copays to your annual deductible.
Speaking of deductibles, your deductible is the amount you spend on health care each year, and once you’ve paid your deductible, all of your discounts, benefits and coverages kick in.
The Explanation of Benefits Form (EOB) will show you how much a doctor charged an insurer, how much that insurer will pay the doctor and how much is left over for you to pay for yourself. You wait for the doctor to bill you for the amount you owe, once you’ve seen the EOB Form.
A Health Savings Account (HSA) is money you use to pay for your deductible, and it’s funded by pretax dollars. These dollars can come from your pretax paycheck, if you wish.
A network is a group of doctors, hospitals and health care providers. As stated above, your insurer and certain providers have already agreed upon how much health insurance is going to cost.
Your primary care physician is your main doctor, the one you go see for routine checkups or small health concerns. HMOs in particular require you to choose and regularly see the same primary care physician.
The Bottom Line
It’s a lot of information to weed through, but once you do, is should become clear what the right kind of plan is for you. Finding the right health insurance can take a load off your mind. Now you can focus on choosing that car …