Understanding Health Coverage
You want to do what’s best for you and your family. Understanding health coverage will help you decode the maze of health benefit options available today. From HMOs and PPOs to Medicare and drug coverage, learn the facts so you may make more informed choices about your health coverage and your future.
Getting Health Insurance
Many people get health coverage through their employer. This is called group coverage. Employers may offer several plans to choose from, and employees get a chance to change their plan once a year during open enrollment.
Some people purchase their own coverage because it is not available through their employer. This is called individual health insurance coverage. Individual health insurance coverage is a good option for people who are:
- In between jobs
- Early retirees
- Recent college graduates
- Part-time workers
Some Americans receive health coverage through government programs. Some examples of government health programs are Medicare, Medicaid and other programs run by individual states.
Types of Health Coverage
Health insurance plans come in all shapes and sizes. That's why it's important to assess your needs before you choose an insurance plan. First, determine what kind of coverage you need, for example, a major medical insurance plan or a temporary insurance plan. A major medical insurance plan usually renews on a yearly basis and does not expire until you decide to terminate the policy or discontinue paying premiums. On a temporary insurance plan, you can decide if you want coverage from one to six months at a time, for a maximum of 12 months.
Major medical insurance plans usually offer an optional dental plan. The dental plan is only offered along with the health insurance plan - it cannot be purchased alone. Additional services that could be included with a health insurance plan are preventive care, prescription drug coverage and vision coverage. It is important to do research so you can find the insurance plan that provides the best coverage and services for you.
Types of Products
The three most common types of health plans are Health Maintenance Organizations (HMOs), Preferred Provider Organization insurance plans (PPOs) and Consumer Directed Health Plans (CDHPs).
HMOs, available through participating employers, are a type of health plan that gives you access to certain doctors and hospitals, often called network or contracting doctors and hospitals (sometimes called "providers").
- When you sign up, you select a primary care physician (PCP) from a network of doctors.
- Your PCP is your first point of contact for most of your basic health care needs.
- Women can also select an OB/GYN for obstetrical and gynecological care.
- If you need special tests or need to see a specialist, your PCP will give you a referral to see another doctor.
The bottom line:
- HMO plans generally have lower up-front costs, or premiums, than other types of plans.
- HMOs usually feature copayments as well. Copayments are set amounts (usually a dollar amount or a percentage) that you pay for care. An example of a copayment is $20 for each office visit.
- HMO plans generally provide coverage only when you use doctors, hospitals and specialists that are in the network.
- If you seek care outside the network, other than in an emergency or with authorization from your HMO, your care typically will not be covered at all.
Like HMOs, PPOs often feature a network of doctors, specialists and hospitals; however, there are some key differences between the two types of plans.
- With a PPO insurance plan, you don't have to choose a primary care physician.
- You have the option of receiving care from doctors, hospitals and specialists in the network or outside the network, and you don't always need a referral to see a specialist.
- PPO insurance plan premiums are generally higher than HMO plans, which means you'll have to pay more up front.
- When you receive care from a doctor or hospital that is in the network, your costs tend to be lower.
- When you receive care from a doctor or hospital outside the network your costs are likely to be higher, and you may be responsible for the difference between the amount your insurance plan pays and the provider's billed charges.
- PPO insurance plans usually have a deductible. So, for example, if your PPO insurance plan has a $500 deductible, your coverage doesn't begin until you've paid out-of-pocket for the first $500 of your own medical expenses. Preventive care services are not subject to the deductible
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