The Basics on Health Insurance

Many people exercise and eat right to maintain their health, but don't think about their health insurance coverage until they need to use it. Like preventive care itself, it's important to take action before a serious health problem arises. Make sure you understand your options and choose a health plan that is right for you.

The Two Major Types of Health Plans

There are two major types of health plans - managed care and fee-for-service.

Managed Care

Managed Care plans are agreements between certain doctors, hospitals, and health care providers, and are designed to offer a range of services to members at a reduced cost. They go by many names, such as Health Maintenance Organization (HMO), Preferred Provider Organization (PPO), Individual Practice Association (IPA), or Point of Service (POS) plan.

Fee-for-Service:

Fee-for-service, also known as indemnity plans, allow you to choose health care providers yourself. This gives you a wide range of options that includes specialists such as cardiologists and surgeons. Your main concern, however, shouldn't be whether the health insurance plan you choose is managed care or fee-for-service. The characteristics of the plan are far more important.

Comparing Your Options

When you compare the options offered by your employer or purchase your own coverage, you must consider the plan's features, overall quality, and affordability.

Examine the plan's features

Whether you choose a fee-for-service plan or a managed care plan, make sure it covers the services you are likely to use. For example, if you decide to change health plans, your prescriptions may no longer be covered. You may also need permission to see a specialist or use a doctor outside of your plan's network. Chronic conditions such as asthma, cancer, AIDS, and alcoholism are treated differently by different plans. Make sure you thoroughly review everything your policy will cover - and not cover - before making a decision.

Evaluate the plan's overall quality

Independent government and non-government organizations rate many health insurance plans. In addition, some managed care groups choose to apply for accreditation, which rates them on standards like quality of care, doctors' credentials, members' rights and responsibilities, and preventive health services. You can find out if performance measure information is available for your plan by asking your employer, calling your state's Department of Health, or asking your state's insurance commissioner's office.

Estimate the plan's affordability

Several factors will affect the affordability of your health care. For example, the amount of your monthly premium may vary depending on the level of service you choose. You also need to consider how high your deductibles will be (both per visit and annually) and whether your provider will pay for preventive care.

Don't wait until it too late to get health insurance coverage. It could cost you more than you ever expected. Get Your Free Quote Today!