Nothing is more confusing than trying to figure out what health insurance to buy. After two years of not being able to afford health insurance, I finally landed a job with benefits (YAY). The initial information about my different coverage options made my brain hurt immediately. With all of the options, I was completely lost.
Well, I learned that all health insurance plans are not created equal. Knowing which plan is for you depends on how much you can spend, how many people are in your family, what health care needs your family needs and other personal factors. The goal is to find the cheapest health insurance possible for a maximum of benefits. If something does not make sense, ask for help! Try and find information from a reliable source.
Health insurance, or really any insurance at all, is about risk. You pay a premium every month in the event that you might need to use insurance. It is hard for someone health like me to continue paying for health insurance when I NEVER visit the doctor. However, insurance is necessary. More than half of the people who declare bankruptcy cite medical bills as the main cause.
Group insurance may be the best option. It is typically cheaper than individual insurance because employers usually pay part of the premium. However, most companies only offer insurance to full-time employees. If you are not working full-time or are self-employed, individual insurance is the only option for you.
Fee-for-Service insurance allows the policy holder (you) to go to any doctor or hospital you choose. Your insurance provider pays for part of it and you pay for the rest, which is the co-pay. Unfortunately, the monthly premium will be much higher than if you had a managed care plan.
A managed care plan is when the health insurance provider has a contract with certain doctors and hospitals, forming a network. When you select a network, your health insurance provider will only pay for services for doctors and hospitals in your network. However, it will be a much higher cost to visit health care providers outside of the network.
There are three main managed care plans:
- Health Maintenance Organization: More popularly known as a HMO, the plan stipulates that you pay a small co-payment and the visits to the doctors are prepaid by your plan.
- Preferred Provider Organization or PPO: If you pay more, you will be able to use doctors and hospitals outside of your network.
- Point-of-Service or POS: This plan is a combination of the HMO and PPO insurance plans. You choose a primary care practitioner who supplies all medical care. Any medical care given by this practitioner is fully covered by your health insurance provider. Any medical services outside of your network will be subject to a large deductible and co-pay.
My one advice? Research. Know which plan is best for you by researching all of your options.