What is the truth about health insurance? Is it possible to find low cost health insurance? The truth about finding low cost health insurance really depends on your understanding of a few key basics. Many people think that health insurance is all the same, but that is not true and making that mistake can cost you money. In this article I will try to help you understand some of the key concepts underlying present day health insurance.
Health insurance, just as with any other sort of insurance, is basically risk management. When you pay an insurance company their monthly fee–called an insurance premium–you are paying them to assume the risk of paying for you health care. The policy that you buy determines the benefits they will pay for should you become ill or injured. When you purchase health insurance, you purchase what is called a policy, which is generally a package of benefits, and the policy spells out the terms and conditions under which the company will pay.
When you shop for health insurance, you discover that there are many different kinds and packages. For many people, health insurance means a coverage that pays the bills for doctor visits, outpatient hospital care, and inpatient stays. However, there are other kinds as well, such catastrophic health coverage, maternity coverage, and dismemberment insurance to name just a few examples. When you search for health coverage, you find an assortment of plans each offering its own package of benefits with its own rate of payment. The insurance plan is the “package” of benefits, and the benefits describe exactly what the insurer will pay for. For this reason, it is important that you understand the package so that you know what to expect when you receive health care.
Examples of different kinds of insurance plans offering different packages of benefits would include the health maintenance organization (HMO), preferred provider organization (PPO), and private fee for service plan (PFFS). An HMO is a kind of plan that includes a set menu of benefits, and your coverage–or health care–would be provided by doctors and hospitals in the plan’s network. By network, I mean those providers who have an agreement to offer care to the plan’s members. An HMO would assign you a primary care doctor and access to specialists and hospitals would require the primary care physician’s referral. HMOs are generally more satisfactory for people who generally have few medical demands and usually need only preventive care.
The PPO is more flexible than the HMO plan. PPOs may also be a bit more expensive than HMOs, and that is because PPOs are generally thought to give a higher level of coverage. In PPOs, you are not required to have a primary care doctor, and you generally do not need a referral to see a specialist. PPOs have their own network of contracted medical personnel but allow you to go out of the network to see doctors of your own choosing. Now, that costs you more. Before signing up for a PPO, it is important that check with your providers to determine whether they are in the network or will otherwise file claims and accept payment from that particular insurance company. Major insurance companies such as Aetna and Blue Cross Blue shield, Wellmark Blue Cross, and Humana offer PPO plans as well as HMO variants.
A private fee for service plan (PFFS) is yet another kind of managed care. However, this sort of plan does not require you to receive care from a network of providers. In the PFFS plan you can receive care from any doctor, hospital, or other health care provider who accepts the plans payment terms. It is advisable that you always check with your providers first before receiving services to be sure that they will, in fact, submit claims to the insurance company. In a PFFS, instead of offering a package of fixed benefits (as in an HMO and PPO), the company pays a set fee for each service you receive that the provider bills to the insurer.
An important question you want to ask before buying a health insurance policy is how much your costs will be. Much of the cost of a plan will include the monthly payments (premiums) along with any deductibles, co-pays, and co-insurance. However, there is another cost to take into consideration, and that is the reliability of the company. It is important that the company live up to its promise of coverage. This is a fairly controversial issue right now and another reason to taking the time to understand the policy before you buy. A plan that looks cheap could end up costing a lot more than a more expensive plan or a different plan from a different insurance company.
It is possible to find cheap quotes for health insurance, but the secret to getting a low cost plan lies in paying only for the key services you need. Basically, then, you want to remove from a policy every benefit you can do without and then assume as high a deductible as possible. And again, you want to undertake the due diligence to establish the company’s reliability. In a time of need, it is vital that the insurer pay in a timely fashion without argument.
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