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The is no right health plan. The right health plan is the one
that best suits your needs. Features and options vary widely among
types of plans more so than among companies providing the plans. Where
things vary among companies is usually cost - depending on your personal
circumstances, some companies' rates may be less than others. You don't need
to be an expert, or even spend a lot of time, to figure out which plan type
is best for your needs. Understanding which type of plan offers the things
you want should make a decision pretty easy. Here's a rundown of the main
differences among plan types:
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HMOs
A Health Maintenance Organization (HMO) is
like a club for both patients and health care providers. Subscribers to an
HMO receive medical services from participating physicians, clinics and
hospitals. An insurance company sets up an HMO and gets a group of doctors
to participate. Everybody agrees on certain costs and charges, which lets
the insurance company control expenses and give you lower prices. But if you
join an HMO and your previous doctor isn't a member, you can't bring him or
her with you. HMOs work like this:
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You choose a primary care
physician (PCP) from a list of participating doctors. He or she is your
personal doctor, who you see for routine medical care like annual exams
and health issues. If you need to see a specialist, be hospitalized, or
have lab or X-ray work, your doctor will refer you to a provider or
facility. Your doctor must give authorization for those services to be
covered by your HMO.
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You may have to pay some
portion of the cost (called a co-payment) for each office or hospital
visit, such as $15 per doctor visit, regardless of what the services cost.
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You may have to pay extra
for some services (emergency room, mental health and chemical dependency
services, for example).
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You do not have to fill
out claim forms, which makes this a relatively simple system.
PPOs
PPOs offer choices and access, but there is
typically a cost associated with that freedom that is higher than HMO costs.
Like an HMO, it is a network, but rather than choosing a primary care
physician, you can see any health care professional in the network any time
you choose to make an appointment. You don't need referrals for specialists
or other services. You can even see professionals outside the established
PPO network, but if you do so, your portion of the costs will be higher.
PPOs work like this:
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You will have choices to
make about your insurance options within the PPO system when you enroll.
Your choices will apply to you and any dependents you enroll in the plan,
and can usually only be changed once a year during "open enrollment"
periods.
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You'll receive a list of
participating medical professionals, which you can use to find health
care. Or you may continue to see anyone you already use.
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You may have to pay a
portion of the cost for each office or hospital visit, regardless of how
much the visit costs. Your portion is the "co-payment."
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You may have to pay extra
for some services (emergency room, mental health and chemical dependency
services, for example).
Point-Of-Service
These plans combine characteristics of HMOs
and PPOs. You choose a primary care physician who controls all aspects of
care, including referrals to specialists. All care received under that
physician's guidance (including referrals) is fully covered. Care received
by out-of-plan providers is reimbursed, but you have to pay a significant
co-payment or deductible. So basically, you decide each time you need
medical care whether you want to use your plan as an HMO or a PPO.
Traditional Indemnity/Major
Medical
This is the least restrictive option of the
three main plan types. TI lets you see any licensed health care
professionals for anything covered by the insurance. You choose deductible
and other options when you enroll, and those apply to you and any dependents
you enroll in the plan. TI works like this:
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The deductibles you
choose apply to each person enrolled in the plan (so if you and a spouse
enroll and select a $250 deductible, you each must pay $250 in
medical expenses before your plan starts paying further costs each year).
But companies typically set a maximum of two or three deductibles per
family.
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Costs that exceed your
deductible are covered by a coinsurance plan, so you and the insurance
company share the cost for services covered by the policy. For example,
with an 85/15 provision, the insurance company pays 85% and you pay 15%.
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After you meet your
deductibles, coinsurance maximums apply that protect you from skyrocketing
bills.
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