Health Insurance: Choosing The Best Policy For You
If you are trying to select a health insurance option
, you may be having some difficulty. There are many different insurance plans to choose from and you want to find the one that best fits your individual needs without spending too much. It is imperative that you have a basic understanding of health insurance plans before making a decision.The three forms of health insurance payments are premium, co-payment, and deductible. A premium is the overall cost of your medical insurance that you pay to the insurer. It is usually an annual rate that is split into monthly payments. A co-payment is a set amount that you pay to a health care provider before they provide care to you. A deductible is money that you pay to the health care provider, either a fixed amount or percentage of the bill, that you must pay before the insurer pays the remainder.
In the world of medical insurance, plans can really be broken down into four broad categories. The categories are health maintenance organization (HMO) plans, point of service (POS) plans, preferred provider organization (PPO) plans, and fee for service (FFS) plans. Each of them has varying degrees of flexibility and premium costs. They each also have particular advantages and disadvantages associated with them.
Health maintenance organizations (HMOs) are typically the cheapest type of policies and the most limited. In an HMO, you are assigned a primary doctor for all of your health care needs. If they are unable to provide a service, they refer you to a specialist that can. Co-payments are the form of payment used with HMOs and the insurance company will only cover medical bills from your primary physician and specialists they refer you to. If you use another doctor without a referral, they will not cover the expenses.
The point of service (POS) plan is considered the next step up. With a POS plan, you still have a primary physician, get referrals for specialized care, and make co-payments. The difference between an HMO and a POS is that you have the option to seek care from other doctors, but you will have to pay a deductible for that care. The premium is also more expensive.
A health insurance plan that is gaining popularity is the PPO. PPOs do not have assigned physicians, but rather a network of physicians. You are free to see any doctor within the PPO network, which usually encompasses doctors of almost all specialties, for a low co-payment. Yet, you still have the option to seek care outside the network by paying a deductible.
The FFS plan is the most flexible and usually the most expensive. This plan allows you to choose any doctor that you would like. Some insurance companies offer this policy with a co-payment, but more often that not it will be a deductible. Insurers will typically add a cap to this service as well. You are responsible for paying for any costs that exceed the cap.
There are many things to consider when you are choosing a health insurance policy. You should evaluate the pros and cons of each policy type and determine which one is most suitable for you. Most importantly, you should fully understand all of the terms and conditions of an insurance policy before signing up for it.
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