How to make a wise choice
Healthcare delivery options fall into four categories that are sub-categorized as high or low. The High Option cost-sharing level requires higher premiums but has lower deductibles, lower co-payments and lower out-of-pocket expenses. Lower premiums are an important selling point for the Low Option, but deductibles, co-payments and expenses are higher. Each of the following plan categories offers high and low options.
INDEMNITY
A fee-for-service (FFS) traditional payment plan. The covered person and the insurance carrier pay a percentage of the allowable charge for the service rendered. The policy holder may choose the physician, hospital or other healthcare provider without restriction. Pre-set deductibles are required.
INDEMNITY PPO
(Preferred Provider Organization) – Also a fee-for-service plan, but the covered person is required to use a physician, hospital or healthcare provider from the plan’s Preferred Provider list. Usually PPO contracts provide significantly better benefits in exchange for the policy holder’s agreement to stick to the preferred providers. If you use out-of-network providers, your out-of-pocket expenses will be higher, and some services may not be covered.
MANAGED CARE EXCLUSIVE HMO
These plans do not provide for any out-of-network care except in emergencies and special cases. There is no annual deductible, and members pay a flat co-payment rather than a percentage of the allowed charge. Your care is coordinated by a Primary Care Physician (PCP) who determines how, when and where you will be treated, as well as what specialists and hospitals you may be referred to.
MANAGED CARE POS
(Point of Service) – Plans that combine features of an Exclusive HMO and an Indemnity PPO. Out-of-network care is covered. The plan may provide for a primary care physician, but you will have access to a wider range of doctors, as in a PPO plan. If you choose to use in-network providers, a flat co-payment applies; out-of-network care requires higher deductibles and higher out-of-pocket expenses.
These plans do not affect Medicaid coverage, Medicare Supplements or Medicare benefits. Plans can be designed to fit your specific needs and can be purchased through agents or directly from the insurance carrier.
It’s important to remember that you need to know exactly what is covered in your plan – and what is not. Study your options and know what is available. Consult an expert. Try to mix prudence with a dash of foresight as you search for the plan that is best for you.
Choosing a health-insurance policy:
- Evaluate your current coverage for benefits, exclusions, out-of-pocket expenses, premiums, etc.
- Decide on the type of plan you want (indemnity, PPO, HMO, POS) and the benefit level that fits your needs.
- List the additional kinds of coverage you feel you need (e.g., OB, allergy, etc.).
- Add in the optional features (riders) you want.
- Check with your agent, employer, or other plan source to find out which carriers in your area offer the type of plan you want.
- Comparison-shop for the best value (taking into account such matters as high or low option, deductible, co-payments, coinsurance, maximum out-of-pocket expenses) and check to see whether the doctors and hospitals you want to use are on the insurance carrier’s list.
- If the price is right, buy the policy.
- If the price is not right, you’ll have to decide where to compromise. Re-evaluate the need for optional features, delivery options, etc., and compare again.
What’s covered
Most health-insurance plans cover most of the following expenses:
- Physician office visits
- Hospitalizations
- Lab work and tests
- Prescription drugs
- Maternity care
- Annual OB/GYN exams
- Mammography and other screening tests
- Contraceptives
- Well-child care and immunizations
- Emergency services
- Home healthcare
- Transplants
- Therapy (physical, occupational, cardiac, speech and allergy)
- Substance-abuse care
- Mental-health care
A policy holder can often pay extra for supplemental “riders” to cover the following:
- Dental care
- Vision care
- Obstetrical services
- Mental illness
- Home healthcare
- Substance-abuse treatment
- Prescription drugs
- Durable medical equipment
- Therapy and allergy services
- Fertility services
- Elective abortion
- Nursing facilities
