Selecting the Right Healthcare Insurance Plan

Selecting the Right Healthcare Insurance Plan

Consumers have many options when selecting a Healthcare Insurance Plan.  Every year, employers ask their employees to a select a new healthcare insurance plan. The Federal Government asks some of us yearly to select an insurance plan; The Affordable Care Act through the insurance exchanges, Medicare advantage plans or Medicaid recipients selecting an insurance plan.  Whichever group you are associated with, the process of understanding the differences between plans can be overwhelming.

Selecting an insurance plan is a very important process that requires patience, a learning curve, an understanding of you healthcare needs and spending, determining if your physicians and healthcare providers are covered under the plan and an understanding of premium and out of pocket costs.

This section will start with what questions you should ask yourself and the health insurance company, followed by an overview of each plan available to you.  We would also recommend completing our Personal/Family Healthcare Planning Process.  This process will further define your healthcare needs.   The last section will be a work sheet to assist consumers to outline the benefits for each insurance plan you want to review.

Questions to Ask

This section is designed to answer some basic questions to start the research process and a step by step process to assist with selecting a health insurance plan.

Question Suggestion
Do I need health Insurance? Most consumers want health insurance, but cannot afford the coverage. Some consumers are young and healthy and believe they do not need insurance.  Health insurance protects the consumer from any unexpected healthcare expense.

SUGGESTION:  YES

Should I pay the Obamacare tax penalty? Remember, starting in January 2014, if you do not have health insurance, the following will apply to most consumers:

2014/2015: $95 per adult or 1% of annual income, whichever is greater.

2016: $695 per adult or 2.5% of annual income, whichever is greater.

SUGGESTION: PROBABLY NO OR PAY THE TAX PLUS ANY HEALTHCARE EXPENSE YOU INCUR

Do I qualify for a tax credit/subsidy? Based on your current income, the consumer maybe eligible for a tax credit or subsidy.

SUGGESTION:  DO RESEARCH TO DETERMINE IF YOU QUALIFY

 

 

 

 

 

Can I afford the financial risk? One major illness could spell financial ruin.  The number 1 reason consumers file for bankruptcy is medical debt. Most consumers cannot accept the financial risk.

SUGGESTION:  NO

Should I be proactive about my health? YES.  Most insurance plans have Essential or Preventive Care Benefits.  Consumers can take advantage of annual physicals, mammograms etc.. without any out of pocket expense.  Being proactive about your healthcare is an investment in the future.

SUGGESTION:  PURCHASE A HEALTH INSURANCE PLAN AND TAKE FULL ADVANTAGE OF WHAT IS AVAILABLE FOR FREE

Which insurance should I select? Insurance plans are specific to you healthcare needs and financial status.  This process can be used if your employer is offering a plan or you are going the Marketplaces or Insurance Exchanges. The following should be considered:

1.    Answer all questions above

2.    Do not delay in starting your research

3.    Determine your premium budget

4.    Determine what you can afford to pay out of pocket

5.     Determine if your doctors/providers are in the insurance plan net work

6.    Compare covered benefits and out of pocket expenses

7.    Choose your plan and network

8.    Determine if your employer offers a Health Saving Account or a Flex Spending Account


Health Insurance Plans Available to the Consumer

The following is a list of plans with a definition of the plan.

Health Maintenance Organizations (HMOs)

HMOs offer a network of health care providers that can be limited to select doctors and hospitals.

     Plan High Lights

You must select a primary care doctor to manage your healthcare

You cannot go to specialist doctor without a referral from your primary care doctor

Premiums a generally lower with HMO plans

If your doctor, hospitals, etc are in network your out of pocket is lower; if not in network, you pay more

Exclusive Provider Organizations (EPOs)

EPOs offer a network of healthcare providers that are less limiting than HMOs

     Plan High Lights

 A primary care doctor to manage your health care is not required

You can go to a specialist doctor without a referral from you primary care doctor

Premiums are generally lower with EPO plans

If your doctor, hospitals, etc are in network your out of pocket is lower; if not in network, you pay more

Preferred Provider Organizations (PPOs)

PPOs offer a network of healthcare providers and the choice to select an out of network provider for a little more out of pocket expense

     Plan High Lights

A primary care doctor to manage your health care is not required

You can go a specialist doctor without a referral from you primary care doctor

Premiums are generally higher with PPO plans because they offer more flexibility

If your doctor, hospitals, etc are in network your out of pocket is lower; if not in network, you pay more

Point of Service (POS)

A POS is very much like a PPO with one exception; you are required to obtain a referral from an in network doctor to see a specialist doctor

     Plan High Lights

A primary care doctor to manage your health care is not required

You can go a specialist doctor with a referral from you primary care doctor

Premiums are generally lower with POS plans because they offer more flexibility

If your doctor, hospitals, etc are in network your out of pocket is lower; if not in network, you pay more

High Deductible Health Plans (HDHPs)

HDHPs are becoming more common.  The deductible is a set amount of money the consumer pays before the health plan starts to pay. These plans are generally defined by the amount of the deductible; $1,300 per person and $2,600 per family per year or a lot more. Most plans have in network and out of network healthcare providers.

     Plan High Lights

A primary care doctor to manage your health care is not required

You can go a specialist doctor without a referral from you primary care doctor

You pay for all services until the deductible is met; Doctor visit, Hospitalization, Pharmacy Items, etc…..

The consumer assumes more financial risk with a HDHP

Premiums are generally lower compared to all plans because of the high deductible amount

If your doctor, hospitals, etc are in network your out of pocket is lower; if not in network, you pay more

Fee for Service (FFS)

FFS plans are rarely available today to purchase.  They establish a set amount they will pay for a service and the consumer pays the remainder. There is no in network or out of network providers.

     Plan High Lights

A primary care doctor to manage your health care is not required

You can go a specialist doctor without a referral from you primary care doctor

You have the freedom to choose any healthcare provider

In some instances, the consumer pays up front and is required to bill the insurance company to be reimbursed

The consumer assumes more financial risk

Premiums are generally the highest compared to all other insurance plans

Catastrophic Insurance Plans (CIPs)

CIPs are generally for consumers under 30 years old or for healthcare consumers that cannot purchase any other health insurance.  These plans are design to protect consumers for major illnesses or injuries. They are not designed to cover basic healthcare services.

     Plan High Lights

 Usually a very high deductible; $10,000 or more

Very low premiums

High financial risk and substantial out of pocket for the consumer

Not intended to be used for routine medical care

 

Insurance Plan Selection Work Sheet

COMPLETE FOR EACH INSURANCE PLAN

 

PREMIUM COST/

OUT OF POCKET COSTS

DOCTORS/SERVICES

IN NETWORK

ESSENTIAL HEALTH

BENEFITS; List*

  Premium:

Co Pays:

Primary Care

Specialists:

Radiology Services:

Laboratory Services:

Out Patient Surgery:

Emergency Room:

Urgent Care:

 

Prescriptions

Tier 1

Tier 2

Tier 3

Co-Insurance:     %

Annual Deductible:

Primary Care:

Specialists:

Pediatrician:

Pharmacy:

Laboratory:

 

*Those services without a co pay that are free to the consumer.

Selecting a healthcare insurance plan for yourself or family can be a daunting process.  Today’s healthcare consumer must be more proactive than ever.  Out of pocket expenses are increasing, premiums are increasing and managing our healthcare has become the consumers responsibility.  Healthcare planning and budgeting will be the norm in the coming years.

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