Selecting a health care plan can be an overwhelming task, because the options and coverages can be seemingly endless. Which insurance company should you choose? How much of a deductible should you opt for? Is your current doctor "in network?"
Which is better, a PPO (Preferred Provider Organization) or HMO (Health Maintenance Organization)? Consumer Reports has a guide to help you understand the different "managed care" options available, and to choose the best one for you. The features and differences are many. For example, if you don't want to have to worry about referrals and finding providers "in network," you may want to choose a PPO. With an HMO you might have to pay the full cost to see a provider out-of-network.
Consider a plan's deductible, the minimum amount you'll be responsible for paying before the insurance coverage kicks in. Because the lower the deductible, the higher your premium will be, if you're in good health and have few regular medical expenses, you may want to opt for an insurance plan with a higher deductible.
Next, think about co-pays, the costs you share with the insurance company. You may be responsible for a set amount, say $15, for an office visit, and $100 for a trip to the emergency room. Insurance plans also often have co-insurance, where you'll share an 80/20 or 90/10 or similar agreement with the insurance company. They'll pay 80 percent of the bill, and you'll be responsible for the balance, up to your out-of-pocket maximum, after which insurance should pick up 100 percent of the bill. The higher your out-of-pocket maximum is, the lower your premiums will be. You should weigh this aspect of each plan carefully.
Beware cheap health insurance. Of course, you want to snag the best deal possible, and pay the least amount in monthly premiums. Fully understand the plan and all of its benefits and limits before you agree to a plan. Ask questions and take notes to compare, if you have to. Check Standard & Poors insurance ratings, and try to choose a plan with a company which has an "A" or higher rating. Watch out for things like "no major medical," "guaranteed acceptance," and discounts up to a certain amount. These can be red flags for "junk" insurance plans.
Buy what you need. Don't get roped in to paying more for extended plans or extra benefits that won't actually benefit you that much. Conversely, don't get caught without the coverage you will need. Does the plan you're considering cover hospital stays and prescription drugs? The plan you choose should cover both, as well as outpatient treatments, emergency services, lab work and imaging, preventive care, mental health, substance abuse, rehabilitation services and maternity care (if you're a female of childbearing age).
Know the difference between a discount plan and insurance plan. For a discount plan, you'll pay a monthly fee for a card that may entitle you to discounts from certain providers. These are not intended to be a substitute for a full health insurance plan, and many are scams that won't actually offer you much for your investment. Consumer Reports recommends familiarizing yourself with the Federal Trade Commission's Consumer Information article about the difference between discount plans and health insurance.
Insurance plans, other than Medicare, must now provide a standard Summary of Benefits and Coverage form, detailing deductibles, co-insurance, co-pays, benefits and limitations. Use this form to help you compare different plans.
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