Choosing Health Insurance

Probably one of the most difficult decisions you can make today is choosing the right health insurance plan. With the formidable number of choices to be made between different plans, deductibles and cost, your final decision will hinge on two things: what you need and what you can afford.

Before investigating plans and choosing health insurance, analyze your family’s needs. Age and marital status will affect the cost of the premium; so will a pre-existing condition. Inquire whether an insurance company will cover a pre-existing condition. Some may cover it right away, some after a waiting period; and some insurance companies won’t cover a pre-existing condition at all.

Make a list comparing the premium amount and coverage offered for each company you are considering. Check co-payments, deductibles, and the cost of co-insurance. Is there coverage for preventive care and immunizations? A higher deductible has a lower premium, but more out of pocket expenses. Determine if this is something you can afford and what is important to you.

Health insurance plans include the HMO, PPO, POS, HAS, and FFS. The HMO (Health Maintenance Organization) has the most restrictions but is the most economical. A specific physician within a network must be chosen and used in order for services to be covered. Before seeing a specialist, you must go to your primary physician for a referral. There is usually either a small co-payment or no charge per visit.

The PPO (Preferred Provider Organization) has a group of preferred providers, and any physician from this list may be used. You may choose a doctor outside of this group, but the plan will cover a smaller percentage, and you will pay more. There are a number of different plans to choose from with different deductibles.

A POS (Point-of-Service) plan is similar to an HMO. You must have a primary physician who then refers you to a specialist. You will be choosing a doctor within a POS network to receive the highest benefits, but you may also choose a physician outside the network. In this case you are responsible for the higher costs involved.

An HSA (Health Savings Account) is a health plan with tax advantages. It works as both a spending and savings account which you draw from when there are legitimate medical expenses. There is an insurance component which provides the medical coverage, however there are higher deductibles and lower premiums. With an individual plan, you will contribute to the HSA with after-tax dollars, and gain a deduction when taxes are filed.

FFS (Fee For Service) is a traditional insurance policy where the insurance company decides on an “allowable amount” for a service. The fee schedule used does not usually cover the physician’s total charge, and is sometimes based on the “usual and customary charge” in a particular geographic area.

Choosing health insurance needn’t be difficult but research your choices carefully, especially any complaints filed by consumers against the insurance company or an individual plan. Even though it is time consuming, your choice will determine how satisfied you are once you need to use your health insurance.