Choosing a Plan
Choosing between health plans is not as easy as it once was.
Although there is no one “best” plan, there are some plans that will be better than others for you and your family’s health needs. Plans differ, both in how much you have to pay and how easy it is to get the services you need. Although no plan will pay for all the costs associated with your medical care, some plans will cover more than others.
Plans change from year to year, so you should carefully consider each plan and weigh each option’s benefits and costs against your needs. (See “Common Consumer Questions”) If you get health insurance where you work, you should start with your employee benefits office. Its staff should be able to tell you what is covered under the plans available. You can also call plans directly to ask questions.
With any plan, there is a basic premium, which is how much you or your employer pay, usually monthly, to buy health insurance coverage. In addition, there are often other payments you must make, which will vary by plan. In considering any plan, you should try to figure out its total cost to you and your family, especially if someone in the family has a chronic or serious health condition.
Health insurance plans usually are described as either indemnity (fee-for-service) or managed care. Indemnity and managed care plans differ in their basic approach. The major differences concern choice of providers, out-of-pocket costs for covered services, and how bills are paid.
Usually, professional indemnity plans offer more choice of doctors (including specialists, such as cardiologists and surgeons), hospitals, and other health care providers than managed care plans. These indemnity plans pay their share of the costs of a service only after they receive a bill.
Managed care plans have agreements with certain doctors, hospitals, and health care providers to give a range of services to plan members at reduced cost. In general, you will have less paperwork and lower out-of-pocket costs if you select a managed care type plan and a broader choice of health care providers if you select an indemnity-type plan.
Over time, the distinctions between these kinds of plans have blurred as health plans compete for your business. Some indemnity plans offer managed care-type options, and many managed care plans offer members the opportunity to use providers who are “outside” the plan. This makes it even more important for you to understand how your health plan works.
Besides indemnity plans, there are three basic types of managed care plans: PPOs, HMOs, and POS plans. Newer coverage options include various consumer directed health plans as well as health savings accounts (HSAs) and high deductible health plans (HDHPs).