Health Insurance

Funny that today's topic is Health Insurance. I'm currently unable to breathe through my nose and my head is pounding due to this cold I've picked up. Not cause enough for me to go to see a doctor, mind you, but topical to the point of Health Insurance nonetheless.

There are many different varieties of health insurance, but there are similar components to most types of policies. Generally there is a list of covered (as well as non-covered) illnesses and calamities. There will be a description of the deductible, and the co-pay. There will also be two other items - Annual Out-Of-Pocket Limit, and Lifetime Limit. Many policies also include a "Network" of member or accepted doctors and facilities.

This review of health insurance applies to both individual and group coverages.

There are essentially three different kinds of plans: fee-for-service arrangements, Health Maintenance Organizations (HMOs), and Preferred Provider Organizations (PPOs). Each type of plan has its own unique features.

Fee-For-Service or traditional health insurance plans offer the broadest choices of providers of health services. In general, you pay for your healthcare up front, and then submit a claim for reimbursement. You pay a monthly premium, an annual deductible, and generally coinsure yourself up to an annual limit. Most plans have a cap on annual out-of-pocket expenses.

There are two types of coverage available - basic, which pays toward hospital room and care costs, surgery, and some doctor visits; and major medical, which provides coverage only for expensive illnesses or injuries. Major medical is generally the cheaper type of policy to purchase.

HMOs are a prepaid health plan, and are generally the least expensive. They are also the least flexible in terms of providers of health services. You pay a monthly premium, and the HMO provides comprehensive care for you and your family. Included are doctor's visits, hospital stays, emergency care, surgery, and the like. The choice of providers is very limited, generally. You'll usually have a copayment fee (around $10 or $20) for each visit. The good news is that there is no claim to file as long as you use the services within the choices given.

PPOs are similar to HMOs in that they are somewhat prepaid, and there is a limited number of choices for healthcare. You'll also have copayment fees with your doctor office visits. This kind of plan is also similar to the Fee-For-Service plan in that you can choose providers outside the "network" of choices, for a higher cost of service, in terms of copayment and deductibles.

When comparing these types of plans, consider the kinds of events that you're likely to encounter: if you're single, with no dependants and relatively healthy, and you don't have a desire to choose your primary physician, you will choose the plan that best fits those needs. If on the other hand you are married with four kids, and have a long-standing relationship with a specific doctor, and you frequent the emergency room (who doesn't with little ones?), you may want a plan that is more flexible and comprehensive.

If you have several choices, make a checklist of the services you use in order to compare the choices. Cost shouldn't be the deciding factor - effective service, providing quality healthcare to your family is the most important. But do your best to keep the costs in check.

Next time, we'll be looking at Auto insurance.

'til then -

jb