How health insurance works
- How to find the best, low cost health insurance plan? I can't tell
you how important it is to do your homework, and in this article I'll
try to help you with some of that homework. You might think health
insurance is all the same, but the devil is in the details and
understanding the details may save you hundreds of dollars.
how
health insurance works - When you buy health insurance, just as with any
insurance, you are paying the company a monthly fee (insurance premium)
to manage the risk of your need for health care coverage. The more risk
the company assumes, the greater the premium. However, you as a
consumer, must understand what you are paying for, and you also have to
be your own watchdog to some degree and pay attention that you get what
you pay for. At its basic level, health insurance is the assumption of
risk on the part of the company.
Health insurance comes in many
different forms. For example, there is disease insurance, accidental
death and dismemberment insurance, catastrophic health coverage, COBRA
insurance, and maternity coverage to name just a few examples. All of
these, by the way, are kinds of health insurance. When you shop for
health insurance you are generally presented with a variety of plans
that offer different benefits and and different levels of coverage.
Insurance plans are the way the insurance is packaged. The plan is the
"bottle" holding the wine, as it were.
Some of the more common
kinds of health insurance plans are the Health Maintenance Organization,
or HMO; the Preferred Provider Organization, or PPO; and the Private
Fee for Service Plan, or PFFS. HMO plans are generally less expensive,
but they required that you use only the doctors, hospitals, and other
health care providers who have a contract with the insurance company to
provide service. You are usually assigned a primary care doctor and must
get a referral to see a specialist. The plan ultimately determines
whether or not you can see a specialist and what services and how many
of each service you may receive. If you are in relatively good health
and have relatively few medical needs, an HMO might work out for you. If
you have a more complicated medial history, you would want to
thoroughly investigate the insurance company and specific HMO to be sure
they have a reliable record of meeting patients coverage needs. Kaiser
Permanente would be an example of a well reputed HMO, and Kaiser Health
Care generally has a good reputation throughout the United States where
it is offered.
The PPO is more flexible than the HMO plan. PPOs
may also be a bit more expensive than HMOs, and that is because PPOs are
generally thought to give a higher level of coverage. In PPOs, you are
not required to have a primary care doctor, and you generally do not
need a referral to see a specialist. PPOs have their own network of
contracted medical personel but allow you to go out of the network to
see doctors of your own choosing. Now, that costs you more. That means
the company provides a lower level of coverage (payment) and make up the
balance. Before signing up for a PPO, it is important that check with
your providers to determine whether they are in the network or will
otherwise file claims and accept payment from that particular insurance
company. Major insurance companies such as Aetna and Blue Cross Blue
shield, Wellmark Blue Cross, and Humana offer PPO plans as well as HMO
variants.
A PFFS plan is still a kind of managed care, but in the
private fee for service plan, you go to any doctor or hospital you
choose as long as they submit claims to to insurance company and accept
payment. In a fee for service plan, your health care providers would
bill the insurance company a specific fee for each service provided.
What the insurer pays is based on a fee schedule.
When you buy a
health insurance plan, the actual cost of the plan is not only the price
of the premiums, deductibles, co-pays and co-insurances. When you
figure the real cost, you must also take into consideration the
reliability of the company in living up to their promise of coverage for
the kinds of services that are important for you and your family. Thus,
a "cheap" plan could end up costing you more if the company doesn't
cover the costs specified in the policy. Humana, for example, may offer
you less expensive plans, but if you have to argue with them over
meeting the basic agreements in the policy, then the coverage would be
useless and the cost to you far greater than you had imagined.
You
can find cheap quotes for health insurance, but the key to a low cost
plan is in coming as close as you can to paying only for a relatively
few number of key services. In other words, if possible, you strip the
policy of every service you can possibly do away with and assume as high
a deductible as possible. Also, you must verify the reliability of the
company because it's important that they pay promptly and without
argument should a time of need arise.