Shopping around for health insurance is not a simple exercise with the wide range of options to choose from, ranging from HMOs to PPOs and other plans. A well chosen health insurance plan can save you a lot of money in the long term. Ergo, it's essential that you research health insurance products in microscopic details before choosing one.
How to Select the Best Individual Health Insurance Plan
Considering the exorbitant bills medical practitioners and hospitals charge for treatment, it's essential that one has an individual health insurance plan that can effectively cover for a substantial part of these expenses. There are a range of individual health insurance products varying in the facilities and degree of coverage they offer. Here are some tips on how choosing individual health insurance plans, tailor made to your own requirements.
Assess Your Health Risk
Firstly, you need to assess your own health risk. What are the individual health care expenses that you normally pay for? What are the kind of health risks that you are prone to, in the near future? Analyzing your own health risk can give you an idea about what kind of health insurance will be well suited for you.
Choosing the Right Type of Plan - HMO, PPO or HDHP?
There are many types of individual health insurance plans that you can choose from. Two of the prime types, which fall under the title of 'Managed Care Plans' are HMOs (Health Maintenance Organizations) and PPOs (Preferred Provider Organizations). HMOs offer health care through a closed network of medical practitioners and hospitals. More flexible than HMOs, PPOs also offer their own network of specialists, with the additional facility of consulting doctors outside the preferred network.
The prime difference lies in the fact that PPOs, unlike HMOs, do not require that you have a primary physician from their network. You can choose any doctor to be your primary physician. PPOs tend to cost more than HMOs, but offer a wider range of consulting medical faculty, compared to HMOs.
A third option is to go for a high deductible health plan (HDHP) and qualify for an HSA (Health Savings Account). HDHPs offer comparatively low monthly premiums, compared to other health insurance plans and enable individuals pay for their own medical expenses through tax deferred savings in health savings accounts. Consider all the details and the pros and cons of HDHPs, PPOs and HMOs, before choosing one.
What is the Monthly Premium?
Though health insurance plans differ in the nature of managed care offered, they all have some common features as insurance products, according to which you can compare them. The most important feature is the health insurance monthly premium charged to the insured. Depending on the amount of coverage offered, the monthly premium will vary. PPOs have a high premium compared to HMOs and HDHPs.
What is the Deductible Amount?
There is a minimum amount of medical expense that you must pay for, before the insurance company starts covering your expenses. It's known as the deductible. The deductible for various types of treatments, varies according to the managed care plan you opt for. Check out the minimum deductible offered by the health insurance plan that you are thinking of buying. Generally, lower the deductible, higher is the premium amount that you must pay for.
Copayment and Coinsurance Details
There is a minimum amount of fees that you must pay for every treatment, while the insurance plan covers the rest. This is known as 'Copayment'. Check out the copayment amounts charged by HMOs or PPOs for different treatments. Coinsurance is the percentage of medical expenses that are paid for by the insurer. For example, an insurance company may have an 80/20 deal in its agreement, whereby it pays for 80% of the cost of every procedure.
Self Sponsored or Employer Sponsored
It's mandatory for employers to provide a health insurance plan and most of them will enroll you for a group insurance, that provides limited coverage, which may not be enough for most. It's better to go for a self sponsored individual health insurance plan, that provides adequate coverage according to your personal health risk.
Selecting the Right Provider & Researching Plan Details
There are hundreds of insurance providers in USA. Ask around among your friends and family, as well as your financial advisor for recommendations. Make a list of the best insurance providers offering HMO, PPO and HDHP plans. Compare them with respect to the features that I talked about before and select the one which best suits your requirements. Research the coverage details thoroughly.
These were some of the most pertinent points that must be considered when choosing an individual health insurance plan. Choose the best insurance plan that offers you an adequate health risk cover at reasonable premiums and a manageable deductible amount. Research thoroughly and compare all the health insurance products you come across, according to the parameters highlighted above to make the right choice. Read the fine print well, before you decide to sign the dotted line!