| Health Insurance: Understanding the Basics | | | | basic types of managed care - HMO and PPO. |
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| Americans today receive a barrage of health | | | | In an HMO, or Health Maintenance |
| insurance information from every direction. | | | | Organization, you pay a monthly premium in |
| Pundits speak of the national health care | | | | exchange for comprehensive medical care. |
| crisis; Medicare now offers additional | | | | There is usually a small co-payment for |
| options; and employee benefits officers often | | | | doctor's visits (usually ranging from $5 to |
| speak in a jumble of letters from HMO to PPO. | | | | $25), and a somewhat higher co-pay or |
| For the consumer, choosing a health insurance | | | | deductible for hospitalization. Your out of |
| plan can be quite confusing. | | | | pocket expenses are significantly easier to |
| | | | predict and manage with an HMO rather than a |
| Health insurance is not "one size fits all." | | | | fee for service plan. However, an HMO |
| Depending on your current state of health, | | | | introduces the concept of a "gatekeeper." In |
| budget, and individual needs, the best | | | | an HMO, you must choose a primary care |
| insurance for you may be far different than | | | | physician. That doctor, working in tandem |
| the best insurance for your friend or family | | | | with a risk management insurance officer, |
| member. A basic understanding of the various | | | | will determine your access to specialists. |
| types of insurance that are available, and | | | | Finally, an HMO requires you to use doctors |
| what each does and does not cover, can be | | | | that are part of the HMO's network. If you |
| helpful in determining which plan will work | | | | travel a lot, be sure to find out what the |
| best for each person. | | | | provisions are should you require an out of |
| | | | network doctor. |
| Traditional health insurance, also called | | | | |
| "fee for service" or 80/20, is the type of | | | | A PPO, or Preferred Provider Organization, |
| insurance that most of us grew up with. You | | | | can be considered a blend of HMO and fee for |
| are entitled to visit any doctor, and the | | | | service plans. You will choose a primary care |
| insurance company pays 80% of the bill. This | | | | physician, and generally use doctors that are |
| type of insurance offers the greatest | | | | part of the organization. However, a PPO lets |
| flexibility, but carries the highest out of | | | | you see doctors who are not part of the |
| pocket expenses. A deductible must be met | | | | network for a somewhat higher fee. This |
| before the insurance company will pay. The | | | | increased flexibility is excellent for those |
| lower your monthly premium, the higher the | | | | who travel frequently, or for those whose |
| deductible will be. The insurance company | | | | current doctor is not a member of the |
| usually reserves the right to cap payments | | | | organization. |
| if, in their opinion, the doctor's fees are | | | | |
| higher than what is "reasonable and | | | | Many other options exist for covering your |
| customary" in your area. This is an excellent | | | | medical expenses. A Health Savings Account |
| type of coverage to have if you become | | | | allows you to set aside pre-tax dollars each |
| extremely ill and require a network of | | | | month. Catastrophic insurance carries a low |
| specialists, or if your medical bills are | | | | premium with a high deductible, and is |
| astronomical. Once your expenses for the year | | | | designed to cover you if you develop a |
| reach a certain level, the insurance company | | | | serious illness or injury. However, for the |
| will take over and pay 100%. | | | | average consumer, the choice is generally |
| | | | between fee for service and managed care. All |
| Many healthy people do not need fee for | | | | types of plans carry their own advantages and |
| service medical insurance. They find that | | | | disadvantages, and it is important to |
| their out of pocket expenses are much lower | | | | understand what these are in order to make |
| with a "managed care" plan. There are two | | | | the right decisions for your family. |