When selecting a health plan there are three major areas of consideration. Coverage, cost and personal circumstance.
COVERAGE
There are two types of manged care plans that most people choose from, HMO and PPO. Health Maintenance Organization (HMO) plans typically have lower monthly premiums, but often come with more strings attached. They may determine which provider you may see and require referrals for specialist visits and hospital stays. Some policies require several days advance notification before services are approved and some plans make a decision on services almost instantly. The other managed care plan type is the Preferred Provider Organization (PPO) these typically have lower monthly premiums and provide their members with a list of in-network providers that the patient may choose from. The downside to this plan is that if you currently have a physician who is not part of the health insurance network you could find yourself paying 20-100% of the bill for all visits to that particular provider up the the annual out of pocket maximum amount.
COST
When evaluating the overall cost of the plan there are several separate charges to take into consideration. Premium, amount you pay monthly for the coverage, Co-pay, amount you pay when receiving a service, Deductible, amount you pay annually before benefits take over, and Annual out of pocket limit, the maximum amount you will pay out of pocket each year.
PERSONAL CIRCUMSTANCE
Are you planning on moving, having a baby, changing jobs, or have a chronic condition? If any of these circumstances apply to you then it is important to consider not only the cost of the plan, but if you can keep it through these very important life changes. For instance an employer may deduct $50 a week for a really great plan that covers everything you need, however if you leave your job for any reason you may find yourself paying $$700 or more a month to keep the same plan under the Consolidated Omnibus Budget Reconciliation Act (COBRA) which allows you to keep employer sponsored coverage but requires you to pay the entire premium, including your employers share, out of pocket. An alternative to employer sponsored health care in buying an individual policy, this will cost more in the short term, but if you plan on moving or switching into a new job with a waiting period for coverage it could more than pay for itself.
The most important thing, however, in choosing a health plan is to read, read, read. Read as much of the policy as you can stomach and don’t be afraid to call the plan’s hot-line if you have questions. This is a great way to get answers and get a sampling of what their customer service is like.