What You Must Know

Source: InsuranceUSA

In today's world, health insurance is a must. The cost of that insurance is going sky high very fast, with no ceiling in sight. With these high costs, it is imperative to get the most bang for your buck.

What types of health insurance are available? Health insurance plans fall into two types: indemnity plans and managed care plans. Indemnity plans, also known as reimbursement plans, allow you to choose your own health care providers. Indemnity plans will pay for your medical expenses, in whole or in part, sometimes for a specified amount per day for a period of time. You see your doctor, pay for the visit, and submit the expense to your health insurance provider, and they reimburse you based upon the policy you hold.

Managed care plans such as Health Maintenance Organizations or HMOs and Preferred Provider Plans, or PPOs, and Point of Service Plans, or PSOs, generally provide broader coverage which involves an arrangement between the insurer and a selected network of health care providers. An HMO will often require that you have a primary care physician who provides all your health care needs, or refers you to specialists in your network, as needed.

The trick is choosing the right coverage for your individual needs. A good insurance policy will contain several types of coverage.

Hospital expense insurance will pay for your room and most of the incidental costs if you are hospitalized.

Surgical expense insurance covers the costs associated with surgery, including the surgeon's fees.

Physicians' expense insurance pays for doctor's office visits or for doctor's hospital visits.

Major medical insurance will offer very broad coverage with a high maximum benefit designed to protect you against catastrophic illness or injury.

What is covered by these insurance plans?

What each plan will cover depends upon the type of plan you have, but an insurance policy might cover:

Prescription drugs
Preventive care
Maternity care
Vision care
Mental health care
What are the costs?

Your health care policy will involve a monthly premium, but you may have other out-of-pocket expenses as well. Some policies can help with these, as they can add up over time. Check your insurance plan to see exactly what is covered. You may be required to pay for the following:

Co-payment: The amount you will pay for each visit to a health care provider. This is most often required with an HMO.

Deductible: This is the amount you will have to pay your health care provider, usually per year, before the insurance company will begin to pay towards your health care costs. These are generally required from indemnity plans.

Coinsurance: This is the percentage of the costs you will be required to pay after you reach the deductible costs.

Health insurance is most often provided through your employer or your school. A group plan such as this is often an excellent option, as the group plan is paid in part by the employer or school and by each individual in the plan, reducing the costs for all those in the group's plan. You can also purchase your own individual plan. The benefit of this type of plan is that you can customize it for you or your family's specific needs. Shop around to get rates from several different plan providers to find the plan that's right for you.

The best insurance plan for you is one that provides the most flexibility and greatest benefits for the lowest cost. There are no standard health insurance plans. Some points to consider include:

- The co-pay, deductibles, and coinsurance you might have to pay out.
- What freedom to choose your own health care providers is provided by the plan.
- The health services the plan covers.
- Does the plan cover the providers you are currently using?
- Will the plan cover you and your family?
- Will the plan cover any pre-existing conditions? If it does cover pre-existing conditions, is there a waiting period? The average waiting period is 3 months.
- You should also consider the reputation of the insurance company. You can check for positive ratings from major ratings organizations. More information can be obtained by contacting your state's department of insurance