Health Insurance: basics
If you are literally made of money and have the means of paying all your medical expenses yourself, then you likely do not need health insurance. Unfortunately, this is simply not the case with most people. Health insurance is something that you cannot live without. Finding good coverage at an affordable rate may seem impossible, but it can be done if you understand the basics of health insurance and what to look for in a good policy.
Whether you are looking for group or individual insurance coverage, there are a variety of plans available. Traditional plans include FFS, HMOs, POS plans and PPOs. Understanding these individual plans can help you to make the decision on which one is right for your individual needs.
FFS or Fee-For-Service plans provides a flexible policy but results in higher expenses out-of-pocket, higher monthly premiums and generally more paperwork that must be done by the insured. You have the advantage of choosing the doctor and hospital that you want and visiting a specialist as needed without permission from your physician. Another advantage to this type of coverage is that policies typically have a cap or a maximum amount that you will have to spend in one year for medical expenses. Once the cap has been reached, the insurance will begin paying 100% of all your health care expenses.
An HMO policy has its advantages as well. These are typically the policies that offer the least expensive premiums and are more flexible in terms of coverage than other plans. HMO policies offer lower co-payments and very little paperwork when compared to other plans. You are typically granted a wide network of physicians and hospitals that you can choose, although you are required to select a primary care physician or PCP for an HMO policy.
A POS plan is even more flexible than an HMO. Although you are required to choose a PCP under POS plans, you are permitted to use a physician that is outside your normal network and still be covered. This coverage is typically less than what you would receive for a physician inside your network however. Coverage under a POS plan also provides more preventive care services and well-being services.
PPO plan advantages include a low co-payment for normal physician visits, typically around $10 per visit. You have the advantage under a PPO plan to visit a specialist as well, without a referral from your regular physician. This specialist however, must be included in your network.
Health insurance comes in many forms. All plans have distinct advantages as well as disadvantages, depending on your personal needs. Some have lower premiums while others have lower out-of-pocket expenses and co-pays. You may find many policies that include prescription drug coverage to an extent as well. The best way to choose a good health insurance policy is to spend some time reviewing all the available plans in your area and choosing the one that best suits your needs as well as the needs of your family.