Choosing Health Insurance Plans For You and Your Family
I know that choosing the best health insurance plan can be very confusing.
After all, most of us are not benefit professionals, and we need to wade through a lot of details to get to that right plan.
Our parent's generation probably had it a lot easier.
For one thing, health care was not as expensive.
For another thing, fewer options existed.
They might have chosen a standard indemnity plan from a major company, or just been handed one from an employer.
But now, we face higher costs and more choices, so we need to be more educated in order to choose a plan that fits our needs and budget! PPO plans are still the most popular health plans on the market, especially the individual market.
The main part of a PPO is a network of health professionals.
The insurance company will offer the most coverage for services from those network medical providers.
An insured person is still allowed to seek services outside the network, but will usually have to pay more for it.
PPO plans usually have a specified deductible and out of pocket maximum.
That means that for covered services, the insured person must pay the first dollar amount up to the deductible.
After the deductible, insurance will kick in for covered services at some specified percentage.
Some services, like prescriptions and doctor's office visits may have different coverage, like smaller deductibles or an office visit copay.
PPO health plans suit many families.
Most of the time, the network providers are fine, but they do allow access to out of network providers in case of rare situations.
Also, emergency services are usually covered at the network rate, no matter where they are performed.
And most PPO plans allow non network providers to be covered at the network rate if no network provider is available in the area.
Make sure you understand the policy so you know what is covered, if prior authorization needs to be obtained, and which situations would allow an exception to the network coverage policy.
HSA plans are newer, and they work well for some people.
You have a higher deductible health insurance plan that works with a health savings account.
The account earns interest and, within IRS limits, contributions are tax deductible.
If regular contributions are made, the money in the HSA can be available to cover the higher deductible, and even to pay for approved medical services that are not covered by major medical at all.
For instance, many dental services can be paid for by the HSA account that would not be covered under a major medical plan.
If some of of the money is not used in a year, it will roll over to the next year.
No money is ever lost, and the money can be taken out at retirement (Medicare) age.
Good savers will like HSA plans.
People who may have challenges saving money, and like the more predictable nature of just paying a PPO insurance bill, should probably choose a more traditional insurance plan.
Some people, who have stable finances and disciplined savings plans, are very satisfied with HSA plans, because they can keep insurance premiums low.
A lot of the money only gets spent when the service is paid for.
But other people, who may have unexpected bills that limit HSA contributions, are not happy when they do not have much money in their savings account to pay for services and their actual medical deductible is still very high.
If you try one sort of plan, from a company that offers both, and find that you are not satisfied, do not panic.
Insurance companies will usually let you switch from one sort of plan to a comparable plan of the other type.
After all, they would rather have you switch plans, but keep them as your health insurance company!
After all, most of us are not benefit professionals, and we need to wade through a lot of details to get to that right plan.
Our parent's generation probably had it a lot easier.
For one thing, health care was not as expensive.
For another thing, fewer options existed.
They might have chosen a standard indemnity plan from a major company, or just been handed one from an employer.
But now, we face higher costs and more choices, so we need to be more educated in order to choose a plan that fits our needs and budget! PPO plans are still the most popular health plans on the market, especially the individual market.
The main part of a PPO is a network of health professionals.
The insurance company will offer the most coverage for services from those network medical providers.
An insured person is still allowed to seek services outside the network, but will usually have to pay more for it.
PPO plans usually have a specified deductible and out of pocket maximum.
That means that for covered services, the insured person must pay the first dollar amount up to the deductible.
After the deductible, insurance will kick in for covered services at some specified percentage.
Some services, like prescriptions and doctor's office visits may have different coverage, like smaller deductibles or an office visit copay.
PPO health plans suit many families.
Most of the time, the network providers are fine, but they do allow access to out of network providers in case of rare situations.
Also, emergency services are usually covered at the network rate, no matter where they are performed.
And most PPO plans allow non network providers to be covered at the network rate if no network provider is available in the area.
Make sure you understand the policy so you know what is covered, if prior authorization needs to be obtained, and which situations would allow an exception to the network coverage policy.
HSA plans are newer, and they work well for some people.
You have a higher deductible health insurance plan that works with a health savings account.
The account earns interest and, within IRS limits, contributions are tax deductible.
If regular contributions are made, the money in the HSA can be available to cover the higher deductible, and even to pay for approved medical services that are not covered by major medical at all.
For instance, many dental services can be paid for by the HSA account that would not be covered under a major medical plan.
If some of of the money is not used in a year, it will roll over to the next year.
No money is ever lost, and the money can be taken out at retirement (Medicare) age.
Good savers will like HSA plans.
People who may have challenges saving money, and like the more predictable nature of just paying a PPO insurance bill, should probably choose a more traditional insurance plan.
Some people, who have stable finances and disciplined savings plans, are very satisfied with HSA plans, because they can keep insurance premiums low.
A lot of the money only gets spent when the service is paid for.
But other people, who may have unexpected bills that limit HSA contributions, are not happy when they do not have much money in their savings account to pay for services and their actual medical deductible is still very high.
If you try one sort of plan, from a company that offers both, and find that you are not satisfied, do not panic.
Insurance companies will usually let you switch from one sort of plan to a comparable plan of the other type.
After all, they would rather have you switch plans, but keep them as your health insurance company!