Medical Insurance Basics

Choosing the right health plan is a very important decision. That is why we work with companies that provide superior benefits with exceptional value at an affordable price. There are many things to consider when considering what type of coverage is best for you.

HMO or PPO? It all depends on the type of consumer you are... Do you like to choose your own doctor? Or, is managing the cost of care more important?

If you choose an HMO you need to also consider the provider choices you have. Make sure to also have a "getting to know you visit" after your plan becomes effective. One of the worst things you can experience is finding out you don't like your doctor when you are sick, and then having to wait to switch doctors. They key to most of your health care is choosing the right doctor. In general, when applying for an HMO on a family or individual basis, you may find the premium to be slightly more expensive than a PPO because you are paying for your care in advance.

When you choose a PPO, the choices of providers are a lot greater. However, there are additional expenses you need to consider. PPOs come with deductibles for many services like x-rays and lab. In some cases deductibles are waived for office visits. In most cases you can expect to pay for a hospital deductible as well. The biggest benefit a PPO member has is the choice of his or her own doctor who participates in a health plan's large network, with out needing a referral. Remember the out of pocket cost of care in a PPO will be higher than an HMO because you are sharing in the cost, as you need it.

As you can see, there are a number of things to think about when considering what type of coverage is best for you, your family, your parents or your business. It helps to speak to a professional. Please contact us and we will be more then happy to assist you!

The health insurance premium

Buying a medical insurance policy is more of an ongoing process than a one time purchase. To maintain your health coverage, each month you pay a fee, or premium to your medical insurance company.

This payment is similar to club dues. The money is not earmarked specifically for your use, but is instead the cost of membership. In this case, your premium won't go only towards your future health care services; it's simply the fee you pay to be covered by your health insurance company.

The deductible, co-payment and co-insurance

But the cost of health services is not simply eliminated by paying the monthly premium. There are other costs associated with major medical insurance coverage.

The first cost you'll encounter is the deductible. The deductible is a pre-arranged dollar figure that you'll have to satisfy before the health insurance company begins to contribute any money to your health care costs.

Your deductible can be a significant out-of-pocket expense, particularly because it must be satisfied each year before the company pays. (So paying $1000 this year for medical services will not decrease your deductible next year.)

Deductibles can range from a few hundred dollars to a few thousand. Some health insurance policies do not have deductibles ever and others have them only in certain cases.

The other expenses are co-payments and co-insurance. All medical insurance policies will ask that you agree to one or both of these charges. Co-insurance means you'll be required to pay a certain percentage of your health care costs, and a co-payment means you'll be required to pay a certain dollar figure for each service.

These are usually charged in addition to a deductible. However, in either case, the medical insurance company should pay a substantial amount (or percentage) in comparison to your financial responsibility.

The point of having medical insurance is, after all, to alleviate the financial burden on you and your family in case of medical emergencies and/or chronic illness.

The basic health care services

The largest deciding factor when it comes to your health care is the type of policy you purchase. Indemnity, HMO, PPO, and POS medical insurance plans all have different coverage priorities. Some of these include:

   Doctor Visits
   Preventative Care
   Diagnostic Tests
   Hospital and Extended Care
   Emergency
   Prescription Drugs
   Home Health Care

A really good medical insurance policy should include all these critical areas of coverage. However, a really good medical insurance policy is also really expensive. You'll probably need to prioritize.

An example: A typical fee-for-service (indemnity) plan will be fairly comprehensive except for prescription drugs and preventative care coverage. This is ideal for someone who values the security of extensive coverage over the elimination of routine costs.

If a plan makes up for its lack of coverage in one area by covering services you find essential to your health care, you might be able to overlook its deficiency.

Additional health care benefits

Depending on how much you want to pay or what your family health history is, you might want to include other, less common, areas in your medical insurance coverage. Some of these "extra" coverage areas might include:

   Dental Insurance
   Vision Care
   Care by Specialists
   Care for Mental Health
   Services for Drug/Alcohol Abuse
   Family Planning Services, OB-GYN
   Chronic Disease Care
   Physical Therapy
   Nursing Home and Hospice Care
   Chiropractic Care
   Maternity Care
   Well Baby Care (immunizations, etc.)

One last protection

One additional policy provision for your protection is the "out-of-pocket maximum". This limits the total amount per year you'll have to pay before your medical insurance company compensates you for 100% of your health care costs. This protection is especially important in case of serious illness.