Posted on : December 22, 2008 | By : Sophie Callahan | In : Health Insurance
But were too afraid to ask!
According to Lesson 16 from CNN’s Money 101, there are a few things to know about health insurance:
A lot of people who think they are healthy may believe that having no insurance saves them a lot more money than having insurance. But what if there’s a catastrophe? You may get into a car accident and get hurt or get hurt on your yearly skiing trip. You may be a healthy person but no one can avoid accidents or unexpected illnesses. A major illness can even push you to bankruptcy.
Make sure you compare plans. Benefits vary from plan to plan and comparing plans can help you find the plan that fits your specific needs. Also know that a low premium doesn’t always mean cheaper health coverage. A low premium usually means a higher deductible. This means that you must reach this deductible before the insurance starts paying.
In the event you lose your job, COBRA can protect you from losing your health coverage. COBRA usually has higher premium costs but expensive health insurance is better than none at all. COBRA fills the gap while you are looking for an individual plan, getting on your spouse’s insurance, or finding another job.
Indemnity plans v. Managed Care plans
Indemnity plans allow you to go to any primary care doctor, specialist or hospital. You or your employer pays the premium and there is a deductible that needs to be met before insurance kicks in. After your deductible is met, your health plan pays for a percentage of your health care expenses, usually 80%. Indemnity plans offer the best choice of a provider but usually have more expensive premiums, deductibles, and coinsurance.
Managed Care plans consist of Health Maintenance Organizations (HMO), Preferred Provider Organization (PPO), and Point of Service plans (POS). HMOs have the least expensive monthly premiums but offer the least choice of a provider. HMOs manage both the financing and delivery of a broad range of healthcare services. HMOs focus on prevention and primary care. You usually pay a small copayment for each doctor’s visit instead of a deductible and coinsurance.
PPOs allow you to go to out of network providers but you receive better benefits if you stay in network. You usually have direct access to specialists but some PPO plans require you to obtain a referral from your primary care physician (PCP) before seeing a specialist.
POS plans are a combination between HMOs and PPOs. You can choose how to access the plan each time you need treatment. You can stay in network or go out of network but will have to pay deductible and coinsurance charges if you choose to go outside the HMO network.
To make an informed decision, compare many plans before diving into a health plan that looks good. Check out providers; compare deductibles and premiums, and the benefits associated with the health plan. A good health insurance policy covers hospital expenses, surgical expenses, and physician’s expenses. Some additional benefits are prescription drugs, preventive care, vision care, and maternity care. The best health insurance plan gives you flexibility at a low cost. Make sure you know the health services that you need because you want your plan to cover the health services you need.