Different Health Insurance Plans for Different People
Written by James Chan
Choosing a health insurance plan is similar to choosing any other: the more you pay, the more comprehensively you are covered. Which type of plan you obtain should be determined by who you are and what your health needs are. On one hand, you don’t want to pay thousands for insurance that you’re never going to use. On the other, you don’t want to be hit with a giant medical bill, only to discover that your insurance policy does not cover it. Here’s a guide to navigate between to two scenarios.
For young, healthy people and new families
If you’re young and healthy and do not have chronic diseases that require many visits to the doctor or high medical bills, you should consider an insurance plan that requires the least out-of-pocket and premium costs - something like an HMO.
A Health Maintenance Organization, or HMO, is a managed care organization in which you pay a monthly premium in exchange for a list of health care benefits provided through a “network” of physicians and facilities. In addition, you have to make a small copayment each time you access these services.
HMO Benefits
Low premiums and copayments - It requires the least in fixed costs that have to be paid regardless of health needs. Since young people are the least likely to regularly use medical services, an HMO would obviously appeal to them.
Little Work Required - You don’t have to file a claim form to get coverage for a visit to a doctor or a hospital stay; instead, you simply show your HMO card.
Preventive Care Coverage - HMOs are relatively generous in covering the preventive care that can pay dividends over the years in better health, making it all the more appealing to the young.
HMO Drawbacks
Lack of Comprehensiveness - This can be the case in coverage, particularly in more expensive medical services.
Specialized Care - For specific ailments requires a referral from a primary care physician (PCP), informally known as a “gatekeeper.”
Emergency Care - this coverage can be extremely limited.
Network Coverage - Costs of health care providers outside the HMO network are not covered.
For the middle-aged and their families
In your middle ages (from the 40s to about your mid-fifties), you most likely do not have a debilitating or costly chronic disease. However, you are not as healthy as you have once been: years in the office have led to little pains and aches, you’re starting to take checkups more seriously, and you are starting to need a medicine cabinet.
At this stage, you want something that is more middle-of-the-road, an insurance plan that is not only low-cost but also provides decent coverage of conditions beyond what HMOs cover. What you should consider is a PPO or a POS.
A Preferred Provider Organization, or PPO, operates similarly to a HMO in that you pay a low monthly premium for a network of providers and a list of services. However, there are a few key differences that result in higher costs but better coverage than an HMO: Advantages
No Referral - Seeing a specialist does not require a referral from a primary care physician, making accessing specialized care easier.
Doctor of Choice - PPOs are less restrictive in their choices for a health care provider.
Disadvantages
Cost - Higher out-of-pocket costs. Copayment amounts are higher than that of HMOs and there might also be coinsurance costs.
Less Coverage - You will be able to get limited coverage for out-of-network providers, unlike in HMOs. However, there will be a deductible and even after, costs are higher than for in-network providers.
Paperworks - You will have to fill out your own forms if you go outside a PPO network.
A Point of Service plan, or POS, works slightly differently than a HMO or PPO. You pick a primary care physician from a POS organization’s network who oversees your health care plan and makes referrals to other health care providers and services. These can come outside the network, but with the drawback of higher costs than their in-network counterparts. Here are a few facts about POS plans:
Advantages
Flexibility - This plan offers the maximum flexibility for a managed care plan (depending on your point-of-service physician).
Low Fees - As with HMOs and PPOs, there is no deductible and low copayments for in-network care.
Disadvantages
Comprehensiveness - POS plans are not as comprehensive in coverage for specialist care, as point-of-service physicians may be reluctant to give referrals, especially out-of-network specialists.
Network Coverage - Again, even if you get a referral from your point-of-service physician, non-network health care providers incur higher costs than network ones, including a deductible, coinsurance, and higher copayments.
For the Elderly
Around the time you start having grandchildren is when you probably need to rely on your health care plan the most. Chronic illnesses and severe pains start to pop up in specific parts of your body. You probably see a doctor fairly regularly now, and health care costs are a large drain on your finances. At this point, you want to maximize coverage as much as possible. Cost doesn’t matter as much- an uncovered medical bill for a long-term condition will cost far more than any premium. In this case, a traditional indemnity plan is the best for you.
The traditional indemnityor fee-for-service plan gives you your choice of doctor, hospital, or even surgeon- at higher out-of-pocket costs that include:
A higher monthly premium than managed care organizations.
A yearly deductible that must be exceeded for the insurer to cover any costs.
A per-visit coinsurance or copayment.
Furthermore, indemnity plans can be split into three types:
Basic Health Insurance - This covers hospital care and staying costs, some medical services such as x-rays and medicine, surgery, and a certain number doctor visits.
Major Health Insurance - This covers treatment for long, high-cost illnesses or injuries, and related expenses, whether the person stays in a hospital or not.
Comprehensive Health Insurance - This covers both of the above.
The bottom line is that indemnity plans offer the most comprehensive and flexible insurance plan at the highest costs.
Choosing a health insurance plan is similar to choosing any other: the more you pay, the more comprehensively you are covered. Which type of plan you obtain should be determined by who you are and what your health needs are. On one hand, you don’t want to pay thousands for insurance that you’re never going to use. On the other, you don’t want to be hit with a giant medical bill, only to discover that your insurance policy does not cover it. Here’s a guide to navigate between to two scenarios.
At this stage, you want something that is more middle-of-the-road, an insurance plan that is not only low-cost but also provides decent coverage of conditions beyond what HMOs cover. What you should consider is a PPO or a POS.
The traditional indemnity or fee-for-service plan gives you your choice of doctor, hospital, or even surgeon- at higher out-of-pocket costs that include:
