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.
One of the first things to understand is that when you purchase health insurance, just as with any kind of insurance, you are purchasing a sort of contract that guarantees you a specific set of benefits. In order to remain eligible to receive those benefits, you pay a recurring, monthly fee which is called a premium. The premium is the insurance company’s fee for managing the risk of your need for health insurance coverage. At bottom, all insurance is risk management, and you are essentially paying the insurer to assume the risk of payment for health care.
Health insurance comes in many different forms. For example, there is disease insurance, accidental death and dismemberment insurance, catastrophic health coverage, COBRA insurance, and maternity coverage to name just a few examples. All of these, by the way, are kinds of health insurance. When you shop for health insurance you are generally presented with a variety of plans that offer different benefits and different levels of coverage. Insurance plans are the way the insurance is packaged. The plan is the “bottle” holding the wine, as it were.
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.
Another common sort of managed care plan is the private fee for service plan (PFFS). The PFFS has no pre-established network of doctors and hospitals and leaves your choice of provider up to you. It is important, therefore, that your doctors agree to accept the plan’s payment terms, and that you find out before you receive services if you doctors submit claims to the insurance company. Rather than offering you a fixed package of benefits, as is the case in an HMO or PPO, your providers bill the PFFS a fee for each service you receive, and the PFFS pays for each service according to its fee schedule, or payment rate.
Just what are the real costs of a health insurance policy? The answer to that question will depend in part on the cost of monthly premiums, the deductibles, and the co-pays and co-insurances that you can expect to pay. There is another factor as well that is often ignored, and that is the reliability of the insurance company. If possible, you want to get the best idea you can of the actual reputation of the company for meeting its coverage obligations. In other words, is the company going to pay on the claims per the policy agreement, or will you have to fight every step of the way for your health care. You can see that a plan with a cheap premium could turn out to cost more than a more expensive plan if less expensive plan refuses to pay the medical claims.
You can find cheap quotes for health insurance, but the key to a low cost plan is in coming as close as you can to paying only for a relatively few number of key services. In other words, if possible, you strip the policy of every service you can possibly do away with and assume as high a deductible as possible. Also, you must verify the reliability of the company because it’s important that they pay promptly and without argument should a time of need arise.
Finding individual health insurance doesn’t have to be expensive. Find out more, today!