Tips on Buying Health Insurance
1. Traditional Indemnity
These plans are rarely provided any longer due to their high expense. People who want pure freedom in the selection of their medical providers and who are willing to pay more for insurance may choose these plans.
Advantages:
- The plan allows an individual to choose any health care provider they wish
- They have few restrictions
Disadvantages:
- There are no financial incentives to reduce patient financial responsibility
- The absence of cost containment features creates high premiums and employee contribution costs
2. Health Maintenance Organization (HMO)
These plans have become very popular due to their low cost and comprehensive health insurance coverage.
Advantages:
- There are no deductibles or coinsurance expenses, only a co-payment
- The cost of premiums and employee contributions are low due to the high presence of cost containment features
- Paperwork is practically eliminated for the patient as there are no claims to submit and no EOBs to receive
Disadvantages:
- You can only see a physician within the HMO network
- The primary care physician acts as a "gatekeeper" to specialists
- There is a larger number of cost containment elements in the plan (authorizations, referrals, etc.)
3. Preferred Provider Organization (PPO)
These plans combine aspects of both a Traditional Indemnity and HMO plans. The cost for this plan is also "middle of the road."
Advantages:
- The plan offers financial incentives to see physicians in their preferred provider network
- Many services require the patient to pay just a copayment, such as for outpatient visits or prescriptions
- A person may continue to see a physician who is not part of the preferred provider network, but at a reduced payment
Disadvantages:
- Deductibles and coinsurance do apply for many services, such as hospitalizations and out-of-network services
- Claims are submitted by the medical provider, making it important for the health plan to pay the claim correctly
- The premiums and employee contribution costs are higher than those of any HMO, but lower than a Traditional Indemnity Plan
4. An essential element of choosing the correct health plan is determining what benefits are important to you and whether the plan offers them.
Do you require any of the following benefits in your health plan?
- Maternity coverage
- Prescription coverage
- Well child care
- Immunizations
- Annual physicals
- Dependent coverage
- Specialists coverage (i.e. home care, hospitalizations, vision, dental, speech, etc.)
The more benefits you select onto your health plan, the greater the premium or employee contribution is going to be.
Other Aspects:
1. Is your current physician included in the plan's provider network?
2. Where are the nearest hospitals you can visit with your plan?
3. Is there a wide selection of primary care physician and specialists?
4. What is the financial strength of the insurance company?
5. Make sure that the benefit coverage you require is available. Aside from costs, this is the other most important factor in selecting a health plan.
The premium or your employee contribution will vary depending upon:
- The type of plan you choose (Traditional Indemnity, HMO or PPO)
- The amount you accept for your deductible, coinsurance and copayment
- The lifetime maximums you decide on
- The extent of benefit coverage on the plan
If you want the lowest costs, then an HMO plan with a higher copayment of about $25.00 and a comprehensive, but not overloaded benefits package may be best. If you are more concerned with selection than price, but still want a good price, then a PPO plan with a $250 or $500 deductible may be best. If money is no object, and you want complete freedom on your health plan, then choose a Traditional Indemnity Plan.
What Do I Do Next?
After you have performed the above three reviews on the proposed health plans, it is necessary to compare. Reviewing at least three or four plans will give you a good sense of price range, benefits coverage and other elements essential to you in a health plan.
If it has been difficult finding a health insurance plan due to a pre-existing condition then you may do the following:
You may be eligible for health insurance coverage through a professional organization, school alumni program or union. Look for an HMO plan, as they are the least expensive, and request assistance from an HMO representative. Review the policy on pre-existing conditions regarding exclusions, limitations or waiting periods before you sign. Plans with lifetime maximums of less than $500,000 may not be very useful. Plans that only offer hospital and surgical benefits are also not practical. Accept the highest deductible, coinsurance and copayment you can afford to reduce the premium payment. Ask your State Insurance Department ( our 50 state listing ) if they participate in "Risk Pools" for the "hard to insure".
Tips for Buying Individual Health Coverage
There's strength in numbers, particularly when you're buying health insurance. As part of a group plan, you can enjoy a significant discount on premiums as well as comprehensive policies. But if you leave that job - or start another one that doesn't offer health insurance - you may be surprised at just how expensive the same coverage is when you buy individual health insurance. ("Individual" means the insurance is not connected to a business or to the self-employed. You can purchase an "individual" policy that covers your whole family.) "People enrolled in individual plans pay premiums that are more in line with their expected health costs..."
In addition, there is no guarantee that an insurer will take you on. That's because unlike group plans, if you have health problems, individual plans are medically underwritten and the insurer may reject your application or attach exclusions to your policy. However, some states don't allow this practice and require that any insurer selling individual health plans must offer you a policy, no matter what medical problems you have. However, your premiums are still likely to be substantially higher. People enrolled in individual plans pay premiums that are more in line with their expected health costs, so the premiums will be higher for those who are older or less healthy. To find out what your rights are, contact your state insurance department. You can find the contact information by selecting the state in which you live from the pull-down menu at the top of this page.
Crunching the Numbers
Pricing is probably the most bewildering aspect of individual health policies, so it's worth your while to shop around. For instance, the premiums for similar products from different insurers can vary by as much as 50 percent for the same person. What's more, the rules and regulations about individual health insurance vary from state to state, making comparison-shopping a bear for the uncertain consumer. "The first step is to evaluate your needs and understand your health insurance options..."
If you're faced with finding individual insurance, don't let the confusion tempt you to go without. Even if you're healthy, you could fall off a ladder or have a serious car accident and be financially ruined. Plus, you'll lose your pre-existing-conditions coverage in most states if you go without insurance for more than 63 days.
Finding the right balance of coverage and cost can be challenging, but it's a necessity. So take your search one step at a time. The first step is to evaluate your needs and understand your health insurance options. For some, that may mean buying COBRA coverage from their former employer.
Consider COBRA
When you leave a job, you don't necessarily need to leave your health insurance behind. Thanks to COBRA (the Consolidated Omnibus Budget Reconciliation Act of 1985), certain employers that provide a group health insurance plan must offer most employees who would lose their coverage the option to continue it for up to 18 months. The catch is that the employee will have to pay the full premium, up to 102 percent of the employer's cost. The extra 2 percent is an administrative fee. COBRA is best seen as a safety net. You have 60 days to make a decision about whether to enroll in COBRA, and when you do, the coverage is retroactive. As soon as you know you will be losing your group coverage, start shopping for individual coverage. Go out and talk to independent agents who represent different companies. If you find a policy you like, apply for it. You should be able to find out if you are accepted within those 60 days. If you find a less expensive policy that meets your needs, buy it. If not, you can still elect COBRA. COBRA covers all members of your family, so if you find an individual policy that works for you but won't cover your wife's pre-existing illness, go with COBRA only for her. To learn more, review " Your COBRA rights ".
A pre-existing condition will make finding individual health coverage more complicated - and more pricey - but that shouldn't knock you out of the race completely. The Health Insurance Portability and Accountability Act of 1996 (HIPAA) restricts the ability of insurers to exclude pre-existing medical conditions from coverage - but only if you were previously part of a group plan and meet certain other strict requirements. Read Insure.com's "The HIPAA law: Your rights to health insurance portability".
Navigating the Individual Health Marketplace
COBRA aside, the individual health insurance market is a wild frontier. The landscape varies from state to state and the rules are constantly evolving. That's why it's imperative to comparison shop. An independent agent well-versed in individual health policies can help you sort through your options and find the policy that's right for you and your family. Among your choices, you'll find that the individual health market offers the same plans as the group market, including health maintenance organizations (HMOs), preferred provider organizations (PPOs), point-of-service (POS) plans, and traditional fee-for-service arrangements. Your budget, physician preferences, and health requirements will all have a hand in deciding which type of plan is best for you.
Consumer Tips
What you should do before you buy ... Learn all you can! An educated consumer is a smart consumer. Use this and other Internet sites to learn about
the different types of policies available to you;
- research the companies that are offering the insurance;
- check out the agent and the local company represented;
- make sure you know what the policy will pay for and what it won't;
- determine how you will be reimbursed for your visits, prescriptions, and other medical services.
You might think that the above suggestions should be common sense; but, a surprisingly large number of consumers don't know the answers to obvious questions. What you learn with a little research could save you big dollars, or at least reward you with the peace of mind you'll get when you truly understand the coverage you're getting -- when you're sick or injured is no time to find out what your plan really covers.
More Money Saving Tips ....
Pay your premiums annually. You can save money by paying your yearly premium in one lump sum -- check with your insurance agent about how your savings can be. You can avoid the service fee and could also be eligible for a pre-payment discount.
Move to a higher deductible. If your family has enjoyed good health for a number of years, you may want to switch to a higher deductible of $500 or $1000. You'll notice a significant reduction in premiums.
Don't buy policies that exclude pre-existing conditions. If at all possible, avoid policies with any pre-existing conditions. If you can't locate one without any waiting period, at least get one with no more than a six month period.
Think twice before purchasing "supplemental medical" insurance. Many supplementary policies are not needed because the items they pay for may already be covered under your existing health insurance plan. Check to make sure that the limits for hospitalization and treatment on your main health policy seem high enough; if they don't, shop for another policy.
Enroll in a group plan. Individual health insurance can be extremely costly for self-employed people. By joining some small-business associations, you may have the opportunity to enroll in a group health insurance plan and save money. One such association is Communicating for Agriculture & The Self-Employed, but there are others, too.
What you should do if you've already bought ... Learn all you can! An educated consumer is a smart consumer. Use this and other Internet sites to learn about the different types of policies available to you;
- Review your policy every year.
- Read the fine print to make sure your policy still matches the needs of your family. As the health care system continues to change, and your personal circumstances change, your health insurance policy should reflect today's needs and conditions.
Source: http://www.chcf.org/documents/insurance/OnlineInsuranceConsumer.pdf |
