What types of health insurance are available?
Health insurance plans generally fall into one of two categories:
indemnity plans (also known as reimbursement plans) and managed care
plans such as health maintenance organizations (HMOs), preferred
provider organizations (PPOs), and point of service (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 (doctors, hospitals, etc.). For example, an
HMO will require that a primary care physician in the network
coordinate all of your care and refer you to specialists in the
network.
No matter which type of health insurance you buy,
you'll need to make sure it offers the right kinds of coverage.
What should be covered?
A good health insurance policy contains several types of coverage.
- Hospital expense insurance pays your room, board, and incidental
services costs if you're hospitalized.
- Surgical expense insurance covers surgeons' fees and related costs
associated with surgery.
- Physicians' expense insurance pays 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.
What might be covered?
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
- Vision care
What will it cost?
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 any or all of the following:
- Co-payment: The amount you'll have to pay each time you visit a
health insurance provider (generally required by HMOs).
- Deductible: The amount you'll have to pay toward your medical
expenses (usually annually) before the insurance company begins to pay
claims (generally required by indemnity plans).
- Coinsurance: The percentage of your medical costs you'll have to
pay after you reach any deductibles that apply.