Insuring Your Health
Health insurance protects you and your
family from life's uncertainties. A broken arm, an accident, or maybe a serious illness
that keeps you from going back to work. Being covered means you can have the peace of mind
should the unexpected occur.
Choosing health insurance is not a simple task. You have to be ready to learn about the
different types of health care plans and what they provide in terms of service, benefits,
and costs. You also have to determine what your personal needs are and what you're willing
to spend on adequate health coverage. Only then will you know what type of coverage is
best for your overall needs.
There are three types of health insurance plans: managed care, indemnity (also known as
fee-for-service plans), and government-sponsored health plans such as Medicare and
Managed Care Plans
Managed care plans normally offer a cost advantage over traditional health insurance
plans. In exchange for lower costs, your choice of health care providers is limited to an
approved network of physicians.
There are three main types:
- Heath Maintenance Organization (HMO). With HMOs, you receive managed
care in return for a fixed monthly fee from you or your employer. All your medical care
comes from a single provider, so you're limited to selecting physicians affiliated with
the HMO. If you need to see a specialist for any reason, you have to first go through your
HMO and primary care provider. HMOs have the advantage of lower co-payments and reduced
paperwork. The only disadvantage is the limited physician network from which you can
seek treatment. This could prove disruptive if you have to switch doctors.
- Preferred Provider Organization (PPO). PPOs are similar to HMOs and
fee-for-service plans. An employer provides this type of plan by setting up contracts with
a group of health care providers. By arranging such a network, the employer is able to
keep health care costs low for both you and your health care provider. However, there is
still some flexibility within the plan. You're allowed to see doctors outside the network
as long as your willing to pay higher costs for the service.
- Point-of-Service (POS). Some HMOs will offer a fee-for-service type
plan known as Point-of-Service. With this type of plan, you're allowed to seek care
outside the approved network of physicians. But in order to do so, you must be willing to
pay a higher monthly fee and a higher co-payment for any services you receive.