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There are different kinds of health insurance plans available in the market today. These are the network-based plans, the non-network based plans and the consumer directed plans. Every basic health insurance should be compared on the basis of premiums, coverage/benefits, access to doctors, hospitals and other providers, access to after-hours and emergency care, out of pocket costs (deductibles, coinsurance etc) and exclusions and limitations (pre-existing condition).
There are also two types of insurance. These are the group insurance and the individual health insurance. In a group insurance plan, the kind plan you choose depends on the employer. Some employers may allow you to compare plans and then choose, while other employers may offer only one plan.
Once you have signed you cannot change the plan midway until the next open season. Even if you do not get your insurance, you should always study the coverage your plan offers. You should make sure that all the prior approvals have been taken and should know how to file claim. When a group insurance plan is taken through employee benefit, the employer usually pays either part of the premium or the entire premium. Hence the cost of insurance is usually low for the employees.
The individual health insurance plans come with a very beneficial feature. The self employed workers are allowed to deduct their premiums from the income thus reducing the tax. You should first find out if you are eligible for this above mentioned benefit.
One type of insurance plan is called the indemnity insurance. This is also called a fee for service health insurance. In this type of service, you are only reimbursed for those services that are covered in the plan benefits. The remaining cost has to be settled by you. This type of health insurance was extensively used in 1970s. These days, most people are enrolled in a managed care plan. These may include a Health Maintenance Organization (HMO) or a Preferred Provider Organization (PPO) or a point of service (POS). In these types of plans, the cost is lower if you use the physicians and the doctors and other providers in the network. In an HMO, you should choose your primary physician and always go to him whenever you need to see a doctor. He will then refer you to a specialist that you need. Usually the plan does not cover a visit to the specialist directly. Both PPO and POS allow you to use doctors who are not part of the plan and will still provide you with reimbursement. But the costs are lower in both cases if the doctor is part of the plan network.
Consumer-directed coverage is offered in the form of Health insurance accounts, Health reimbursement arrangement, Flexible spending arrangements, and Archer medical savings accounts. Health insurance accounts and reimbursement accounts are set up to save towards future medical expenses. You can save your pre tax dollars in these accounts. They should be paired with a high deductible plan. Health reimbursement arrangements can be a stand alone account without being paired with any plan.
This article was contributed by Prerna Mordani.
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