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Insurance Classroom
Continuing to understand and learn about
your insurance plans the better you can
utilize its benefits. |
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What types of health insurance are
available?
Health insurance plans generally fall
into one of two categories: indemnity
plans (also known as reimbursement
plans) and managed care plans such as
health maintenance organizations (HMOs),
preferred provider organizations (PPOs),
and point of service (POS) plans.
 | An indemnity plan allows you to
choose your own doctors and pays for
your medical expenses--totally, in
part, or up to a specified amount
per day for a specified number of
days. |
| Managed care plans generally
provide broader coverage, but they
all involve an arrangement between
the insurer and a selected network
of health-care providers (doctors,
hospitals, etc.). For example, an
HMO will require that a primary care
physician in the network coordinate
all of your care and refer you to
specialists in the network.
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No matter which type of health
insurance you buy, you'll need to make
sure it offers the right kinds of
coverage.
What should be covered?
A good health insurance policy contains
several types of coverage.
Hospital expense insurance pays your
room, board, and incidental services
costs if you're hospitalized.
Surgical expense insurance covers
surgeons' fees and related costs
associated with surgery.
Physicians' expense insurance pays
for visits to a doctor's office or for a
doctor's hospital visits.
Major medical insurance offers
extremely broad coverage with a very
high maximum benefit that's designed to
protect you against losses from
catastrophic illness or injury.
What might be covered?
When comparing health insurance plans,
check to see if they provide additional
benefits that you may need, including:
| Prescription drugs |
| Preventive care |
| Mental health benefits |
| Maternity care |
| Vision care |
What will it cost?
In addition to the monthly premium
expense, you may have other
out-of-pocket costs. These costs can
really add up, especially if you have
children or other family members who
visit the doctor frequently. Check to
see if the health insurance plan you're
considering requires you to pay any or
all of the following:
| Co-payment: The amount you'll
have to pay each time you visit a
health insurance provider (generally
required by HMOs). |
| Deductible: The amount you'll
have to pay toward your medical
expenses (usually annually) before
the insurance company begins to pay
claims (generally required by
indemnity plans). |
| Coinsurance: The percentage of
your medical costs you'll have to
pay after you reach any deductibles
that apply. |
Where can I get health insurance?
You may get health insurance through a
group plan at work or through another
group affiliation (a school, a club,
etc.) or by purchasing an individual
plan on your own. By purchasing an
individual plan on your own, you may
even be able to customize the health
plan. Shop online to compare rates from
several companies to find the best plan
and rate to meet your needs.
How do I decide which plan is
best?
The best health insurance plan for you
is the one that gives you the greatest
flexibility and the most benefits for
the lowest cost. Unfortunately, there's
no such thing as a standard health
insurance plan. As you would when making
any major purchase, you'll need to shop
around and get several quotes before
choosing a plan. Here are a few points
to consider:
| What co-pays, deductibles, and
coinsurance requirements apply?
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| How much freedom do you have to
choose your own health-care
providers? |
| Does the plan cover the health
services that you need? |
| Does the plan cover the
health-care providers you're
currently using? |
| Does the plan offer family, as
well as individual, coverage? |
| Does the plan cover pre-existing
conditions? If so, is there a
waiting period? (The average waiting
period is three months to one year.)
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| Does the insurance company have
a good reputation in the industry
and a positive rating from a major
ratings organization? (Contact your
state's department of insurance for
more information.) |
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