[As publishedi n SouthwestHealth] Q: My new employer offers several medical plans. How do I choose a plan?
A: Before choosing a health insurance plan, consider what's important for you and your family. Then talk with your employer's benefits specialist about which of the plans best suits your needs.
You should first think about your family's health. If you are healthy with no chronic diseases, such as allergies, diabetes, or heart or respiratory conditions, you may want to choose a plan with lower monthly premiums and higher deductibles or co-payments.
If you or someone in your family needs regular medical care or supervision, you may want to pay a little more each month but benefit from lower deductibles or co-payments.
Another consideration is the kind of care you may need. Some plans only allow you to see doctors who are part of their network, and others allow you to choose any doctor. You will want to be sure the doctors or hospitals you prefer are included in the plan.
If your family needs specialists who are not in your network, you may want to select a plan that allows you to choose.
More information about health insurance
Types of Insurance Plans
Most health insurance plans can be grouped into two categories: Indemnity or managed care plans. The main differences between these two categories is how much choice you have, how much you pay out of your pocket, and how much your doctor or hospital gets paid.
These descriptions are very general. You should talk with your insurance provider for the specific coverage offered by your health plan.
INDEMNITY / FEE-FOR-SERVICE
Indemnity or fee-for-service plans are traditional health insurance plans where you can choose any doctor, hospital, or other health care providers.
The obvious advantage is that you have more choices. Indemnity plans generally cost you more out of pocket. There is usually a deductible you have to pay each year before your insurer begins to pay. Your doctor may want you to pay first and be reimbursed by the insurance company.
Once you have paid the deductible for the year, your insurer pays a percentage of what they consider the ‘usual and customary' charge for covered services. This may be 80 percent, which leaves you the other 20 percent. If the charges are more than what your insurer considers usual and customary, you must pay the 20 percent plus the difference.
For example, if the insurer believes the usual and customary fee for a procedure is $100 and you have met your deductible for the year, they would pay $80 and your portion would be $20. But if the provider is charging $115, you would pay the additional $15 over the usual and customary fee, for a total of $35 out of your pocket.
Managed care includes PPOs (preferred provider organizations), HMOs (health maintenance organizations) and POS (point of service) plans. All of these plans have some limits on who you may use or what services are covered.
These plans usually negotiate specific fees that your doctor, hospital or health care provider can charge. The disadvantage is if the negotiated rate does not at least meet the actual expenses that the health care provider incurs, they may no longer accept patients from that plan.
For example, if the normal fee for a procedure is $100, your insurer may have negotiated a rate of $90. Depending on your plan, the insurer might pay $75, leaving you with a $15 co-pay. The doctor or hospital must discount the remaining $10.
If the actual costs to provide the procedure are more than the negotiated rate, the doctor or hospital may choose not to renew contracts with the insurer.
- PPO - A preferred provider organization (PPO) is the most flexible of managed care plans. A PPO contracts with doctors, hospitals and other providers for lower fees. PPOs usually allow members to refer themselves to other doctors, even if they are not in the plan.
Generally, your out-of-pocket costs are higher if you go outside of the network. You may also have to pay the difference between what the plan considers its maximum and the actual charges.
A PPO may be a good choice for you if you want more flexibility and choice.
- HMO - A health maintenance organization (HMO) offers members health benefits for a set fee. There are many kinds of HMOs. Kaiser Permanente® is a staff or group model, where doctors are employees of the health plan. An individual practice association (IPA) is another form of HMO, where the plan has contracts with clinics or individual doctors.
Under an HMO, your care is managed by a primary care physician (PCP), sometimes called the ‘gatekeeper.' You may only see a specialist with a referral from your PCP.
There may be no charges for your doctor or hospital visit, or there may be a small co-payment. You should check with your insurer to understand your co-payment requirements.
If you receive care outside of the HMO, your care is not covered. You must pay the bill. There are sometimes exceptions in case of emergencies, but you must verify this with your insurer.
- POS - Some HMOs offer a point-of-service (POS) plan option. Your PCP still manages your care and makes referrals, but you can refer yourself to someone outside of the plan and still receive some coverage. If your PCP makes the referral outside of the plan, you may be fully covered other than your co-pay.
Where do I get insurance?
Most Americans have their health care
through their employer. If your employer doesn't offer health insurance, or you
are self- or unemployed, Washington State offers some options. Visit Columbia United Providers to learn more about your options.