Carey, who is healthy, pays 20 percent of her doctor bills out-of-pocket before submitting them to her plan. She chose a doctor and dentist who don't even accept insurance. Her insurer lets her and her family go out-of-plan to see doctors she trusts, and she doesn't mind paying more for that privilege.
Elizabeth, in contrast, is a freelance writer who wants to keep costs down. When she was single she chose catastrophic health coverage only, with low quarterly payments and a $5,000 deductible. When she married and planned to get pregnant, she knew she and her baby would be seeing doctors often, so she switched to a health maintenance organization.
Both these women feel they are getting the health care they need, though their costs and coverage are totally different. Health insurance is a necessary but expensive item in most of our budgets. How do you make sure that your health care dollars meet your individual needs?
What are the choices?
First, remember that the main goal of health insurance is to protect yourself and your family against the shattering financial costs of serious illness or injury. Beyond that, you need the right balance between costs and services -- a balance that is up to you to decide. Here's help in making that choice.
There are three major options in health coverage today:
HMO:health maintenance organization. You pay nothing or a minimal (usually no more than $10) co-payment for each doctor visit. Often no paperwork is required. But you may use only doctors on the plan, sometimes at specific facilities. Otherwise, if you go "out of network" you often have to pay more. While many HMOs will cover your out-of-network costs, you will often pay more than in-network co-payout. You must consult a ''gatekeeper'' before seeing a specialist. There may also be a limit, or ''capitation,'' on lifetime expenses.
PPO: preferred provider organization. You have the option to use your plan's ''preferred'' doctors for a small co-payment, or to choose doctors off the plan. If you choose off-plan doctors you will be reimbursed for 80 percent of the plan's normal reimbursement, and you are responsible for the rest of the doctor's fee.
POS: point of service. You have maximum flexibility to see any doctor or specialist, but you pay for each service a la carte. The insurance company reimburses after you submit paperwork and after you meet an annual deductible.
Ask the right questions
To get the best health-care plan for you, first answer some basic questions.
- Stage of life: Are you young or getting older, single or married? Do you have children? Are you planning for a baby?
- General health and family history: Do you smoke? Are you overweight? Are you in decent shape? Do you have a family history of disease, such as breast cancer or heart disease?
- Priorities: Would you mind switching doctors to save money? Would you pay more to see a prestigious doctor off-plan? Do you mind paying up front and submitting claims to your insurer? Are you good at record keeping? Do you avoid going to the doctor if you have to pay? Do you or your family need coverage while away from home?
Once you've answered these questions, you can make an individual choice for the right plan. At a minimum, buy coverage against catastrophic illness or injury. Then match your answers to the right plan for you:
Choose an HMO if you're without complicated health problems and you value convenience over flexibility. They are an especially good value for families, with many doctor visits but few serious health concerns.
Choose a PPO if you value control and don't mind paying more. A PPO offers many of the benefits of an HMO plus some old-fashioned flexibility to see a doctor of your choice. Also, people with special health needs may find that a PPO makes seeing specialists easier.
Choose a POS plan if you can live outside the limits imposed by managed care.
Remember, it is much more expensive to buy insurance as an individual than as part of a group. If you are not offered insurance by your employer (or if you are self-employed) you might consider joining an organization that offers group-priced health care to individuals.
Health Insurance Checklist
Insurance needs change with your stage of life and your financial or employment status. Review your health coverage periodically to see if it remains adequate.
A convenient site for research is 4healthinsurance.com, which provides access to all the major insurers' sites. Nonprofit information sources such as the Health Insurance Association of America or the government's Agency for Healthcare Policy Research are also good resources.
You can also look for insurance through a broker, but stick with policies from reputable insurance firms.