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Lesson 3: Choosing the Right Health Plan
In this lesson we're going to help you make what may be the most important decision of the insurance process - choosing the type of plan to join.
In lesson 2 we briefly reviewed the different types of coverage out there. Now we're going to drop you into the mix.
You may already have an idea what type of coverage you want. Most people, all things being equal, would prefer to carry a traditional indemnity policy over joining a managed care plan. The problem is, many indemnity plans are expensive, especially if you're looking at an individual policy that puts you outside a "risk pool" like a group of employees.
On the flip side, very regulated but very inexpensive HMOs may also be unavailable to the individual shopper. These too are largely available only to groups.
So where does this leave you? Will you even have options to choose from? Well yes, maybe just not as many as you'd like. But we're here to help you make the most of the choices you do have.
Finding where you fit in
First off, lets decide where your wants and needs place you on the "health care continuum".
If you're young and healthy, strictly managed care can actually make a pretty attractive option. HMOs are, generally speaking, the most affordable type of plan around, and their emphasis on preventative care makes sense for those who are currently in good health.
HMOs can also be a good fit for new and growing families because they often cover maternity and well-baby expenses that more traditional health insurance plans do not.
Sidebar
For a much more detailed look at each type of plan, click on the highlighted terms, or check out our extensive guide to health plans
To compare the prices of various plans, click here
Who's not right for an HMO? If you already have a valued primary care physician or medical specialists you may not want to lose the freedom to consult whomever you want. If you or a family member has a chronic or serious illness, you also may want to consider other options. Even though most HMO members are generally satisfied with the quality of health care they receive through an the organization, dissatisfaction usually rises with illness.
Next option? A PPO. These are actually more popular than HMOs and they are a wonderful "middle of the road" option.
With a PPO, you get more control over who you see and when you see them, and the plans are usually easier for an individual to join. (outside of an employer-provided program).
The flip side is that they often cover fewer preventative care measures.
A POS plan may also be an option. These plans are half managed care, half indemnity. You're covered as under a managed plan whenever you use a doctor or facility within the network. Outside the network, you pay a set percentage of all costs. Here too, the greater freedom is in exchange for a bigger price tag.
Finally, we have indemnity plans, the perfect choice for the consumer for whom flexibility trumps cost, period.
As you travel along this "health care continuum" you'll be gaining flexibility and expanding your range of medical options, while also taking on more responsibility for costs and paperwork.
Next: Lesson 4: things to watch out for when choosing a health plan
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