Author: Marilyn Katz Added: July 14, 2008
Lots of Americans need to buy health insurance, and when they do, they have one question. They ask what the best health insurance plan is for their family. We actually have a lot more options than we did a few years ago, and that question is not easy to answer. In fact, the only way to find the best medical plan is to determine what we expect from that plan, and also to take a good look at what we can afford. To help you answer that question for yourself, and for your own family, lets look at the common types of policies on the market. PPO (Preferred Provider Organizations) are very common these days, both on the individual and group benefit market. With a PPO, you will have a network of medical providers in your area. If you use that network, the insurance company will provide the most coverage. However, you are free to leave the network, but you must accept a lower coverage level. This plan is probably popular because it allows a consumer the most flexibility, while still providing good coverage. HMO plans (Health Maintenance Organizations), on the other hand, will only cover network provided medical services. Since only services from medical providers who contract with the network are covered, the HMO has more control over medical costs and services. These plans usually provide the highest level of coverage, but also have the most restrictions. It is important to note a couple of exceptions to the network coverage. In general, any emergency will be covered if it is not possible to seek network medical coverage. In some circumstances, medical services may also be covered outside the network if they are not available inside the network. It is very important to understand the policy before the need arises. And non-emergency services must be authorized before hand. A newer type of coverage is called an HSA (Health Savings Account). Now this coverage has two parts. One part is a higher deductible major medical insurance policy. The other part is a special savings account. The idea here, is that the money in the savings account will help cover the higher deductible. Contributions to these accounts, within limits, are tax deductible and can be used for a variety of medical services. Some of these services, like dental or vision, may not even be covered by the medical plan. All of the savings roll over from year to year, so you do not risk losing money you do not spend. And the money can be withdrawn at retirement age without a penalty. It may sound like I am highly biased towards HSA plans. They do have advantages, but they only work for disciplined savers. I have known many people who switched from the HSA to another plan because they did not ever get around to making the contributions, and so the plan just did not work out for them. Beyond these common plans, are indemnity plans and specified benefit plans. These pay a certain amount for different medical services according to a benefit schedule. Before you purchase a plan like this, you really need to make sure the schedule is in line with current medical costs.
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