The ‘Ins and Outs’ of Health Insurance

No matter which type of health insurance you buy, you’ll need to make sure it offers the right kinds of coverage. A good health insurance policy contains several types of coverage. The best health insurance plan for you is the one that gives you the greatest flexibility and the most benefits for the lowest cost. Unfortunately, there’s no such thing as a standard health insurance plan. As you would when making any major purchase, you’ll need to shop around and get several quotes before choosing a plan

What Does Basic Hospital Insurance Cover?

Hospital expense insurance may cover the following expenses:

• Your room
• Your board
• Incidental services costs if you’re hospitalized.

Surgical expense insurance coverage may include:

• Surgeons’ fees
• Related costs associated with surgery.

Physicians’ expense insurance may pay for:

• Visits to a doctor’s office or for a doctor’s hospital visits.
• Major medical insurance offers extremely broad coverage with a very high maximum benefit that’s designed to protect you against losses from catastrophic illness or injury.

When comparing health insurance plans, check to see if they provide additional benefits that you may need, including prescription drugs, preventive care, mental health benefits, maternity care, and vision care.

Out-of-pocket-costs and Considerations to Ask Yourself

In addition to the monthly premium expense, you may have other out-of-pocket costs. These costs can really add up, especially if you have children or other family members who visit the doctor frequently. Check to see if the health insurance plan you’re considering requires you to pay a co-payment (the amount you’ll have to pay each time you visit a health insurance provider) or a deductible (the amount you pay before your health policy kicks in). HMOs generally require a co-payment. Also be aware of coinsurance; the percentage of your medical costs you’ll have to pay after you reach any deductibles that apply.

You may get health insurance through a group plan at work or through another group affiliation or by purchasing an individual plan on your own. By purchasing an individual plan on your own, you may even be able to customize the health plan and help to reduce some of these additional costs.

When determining which plan to consider based on the potential out-of-pocket-costs, you may want to ask yourself the following questions:

• Will you need to consider what co-pays, deductibles, and coinsurance requirements apply?
• How much freedom do you have to choose your own health-care providers?
• Does the plan cover the health services that you need?
• Will the plan cover the health-care providers you’re currently using?
• Does the plan offer family, as well as individual, coverage?
• Can the plan cover pre-existing conditions? If so, is there a waiting period?
• Does the insurance company have a good reputation in the industry and a positive rating from a major ratings organization?

Contact your state’s department of insurance for more information.

HMOs Versus PPO Plans

Health insurance plans generally fall into one of two categories: indemnity plans and managed care plans such as HMOs, PPOs, POS plans. An indemnity plan allows you to choose your own doctors and pays for your medical expenses totally, in part, or up to a specified amount per day for a specified number of days. Managed care plans generally provide broader coverage, but they all involve an arrangement between the insurer and a selected network of health-care providers including doctors and hospitals. For example, an HMO will most likely require that a primary care physician in the network coordinate all your care and refer you to specialists in the network.