These days, choosing health care coverage can be far more complicated than choosing a new car.
There are lots of health insurance models to choose from; each has its unique features; and like cars, the price tags vary widely.
This brochure will help you understand the basics of the major types of health care insurance, so that you and your family can drive home with the best deal possible.

We're all familiar with the traditional ("indemnity") insurance plan that dominated the health care system when we were kids, and still exists today.
You choose any doctor, hospital, or health provider for your care, and the bill is sent to your insurance company.
Once you meet the plan's yearly deductible of $200 or whatever, then your insurance kicks in.
Your medical bills are paid no matter where or from whom you get your care.
But during this time of skyrocketing health care costs, it's thought that managing or controlling this whole process might be a very good idea.
So something called "managed care plans" have been set up to deliver health care less expensively by overseeing the use of the care, the quality of the care, and the cost of the care.
These managed care plans are flourishing in a variety of forms.

AS EASY AS ALPHABET SOUP. . .
The Different Types of Managed Care Plans

Health Maintenance Organization (HMO)

This is the most controlled type of health care plan. You must use the HMO's doctors and facilities. Medical care outside the system is not covered.
But while you do lose some "freedom of choice," you benefit from lower out-of-pocket costs.
HMOs usually have no deductibles or plan limits. For each visit, you pay only a small fee ("co-payment"), or nothing at all.
Because the HMO provides all of your care for one set monthly premium -- no matter how much care you need -- it's in their best interest to emphasize preventive services.
Some HMOs still operate their own facilities, staffed with salaried doctors; others contract with individual doctors and hospitals to be part of the HMO. A few do both.
An HMO can be a good choice if you don't mind the restrictions, if its facilities are convenient, and if you want to avoid most out-of-pocket expenses and paperwork.

Point-of-Service Plan (POS)

This plan operates a lot like an HMO, but it allows you to choose a doctor or hospital each time you need care.
To receive the plan's highest level of benefits, however, you must choose a doctor or hospital within the POS "network." If you choose a provider outside the network, you will have to pay the difference in costs.
A POS plan usually requires you to select a primary care physician, who acts as a "gatekeeper" to control and direct all of your care. This doctor will refer you to specialists, if needed.

Preferred Provider Organization (PPO)

This is a network of doctors and hospitals that has agreed to accept a discounted fee for their services from the plan.
When you enroll in a PPO, you can choose any doctor or hospital on the list of "preferred providers." If you select a provider who is not on the list, the plan will pay less (and you will pay more).
Some PPOs require that you select a primary care physician to control and direct your care. Often, preventive services are covered.
Unlike HMOs, PPO plans are likely to carry deductibles and plan limits. Many offer several different plans, ranging from the most expensive (full coverage) to the least expensive (higher deductibles).
If you like the freedom of choosing your own doctor and hospital, and you're willing to pay some of the costs, a PPO may be for you.

Independent Practice Association (IPA)

This is a loosely organized network of doctors who practice out of their own offices, and treat IPA and non-IPA patients.
Usually, IPA coverage is available only to groups, and there's usually a small so-payment for each visit.
Under the IPA plan, some of the doctor's income may depend on the plan's success (i.e., efficiency). Participating doctors often share in any losses the plan sustains, or in any profits the plan makes.

SELECTING A PLAN. . .
What to look for

When comparing different plans, get the "summary plan descriptions" from your employer or health insurance agent. These will allow you to compare the various types of medical coverage and costs.
While these descriptions can be tedious reading, they'll answer most of your questions.
You can also get a lot of information from your health insurance agent, or the main office of the plans you are considering. Also talk to co-workers and see what's worked best for them.

SOME THINGS TO CHECK OUT
  • Is your current doctor a member of the plan? If not, are you willing to choose a new doctor?
  • Does the plan require that you choose and use a primary care physician? How easy is it to change primary care physicians, if you ever feel the need to?
  • How many of the plan's physicians are board certified?
    Board certification means that a doctor has passed certain exams related to his or her specialty. About 70% of the doctors in managed care plans are certified, compared to the national average of 48% for all doctors.
  • Do you have to pay if you go outside the network for care? If so, how much, and can you afford it?
  • Is the plan's care readily accessible? that is, are the doctors and hospitals conveniently located for you? Are there long waits for appointments? How do you get emergency care? Are specialists available for medical problems that concern you?
  • Will your relationship with your doctor change depending on your plan choice? Doctors must follow a wide variety of plan guidelines in determining your care.
  • Does the plan exclude or limit treatment for pre-existing conditions?


Here are a few terms you may come across when you compare the merits of different health care plans:
  • Capitation: a system where the plan pays doctors a fixed amount to care for a patient over a certain period of time.
    Doctors do not get additional payments, even if the cost of the patient's care is more than what was expected.
  • Conversation: The ability to change your medical coverage from a group plan to an individual plan, if you should leave your present job.
  • Co-payment: The portion of the covered medical expenses that you must pay out of your own pocket.

  • Deductible: The amount you must pay (either per person or per family) before your plan starts to pay its share of benefits.
  • Fee-for-Service: A system where the doctor receives payment only after he or she has treated the patient, and has billed the insurance company. (Fees may be prenegotiated.)
  • "Gatekeeper" or Primary Care Physician: This is usually a family practitioner, an internist, or a pediatrician who provides your care, arranges for tests or hospitalization, and who refers you to a specialist.
    Be careful here: many managed care plans will notpay for medical care unless is provided or authorized by your primary care physician.
  • Preadmission Certification: This is the verification by your insurance plan that a hospital admission is medically necessary.
    Most plans now require that you or your doctor get advance approval for any nonemergency hospital admission.
  • Preauthorization: This is the prior approval of certain health care services (e.g. surgery) by the insurance plan.
  • Pre-existing Condition: This refers to a medical problem or disease that was diagnosed before the medical plan benefits took effect.
    Some plans do not cover certain pre-existing conditions. Some plans require a waiting period before the treatment for that condition is paid for. And still other plans are required by law to cover certain pre-existing conditions.

IT'S UP TO YOU

Once you choose a health care plan, remember that it's your responsibility to understand the plan and to "play by its rules."
If a certain thing is required, such as getting a referral from your primary care doctor before you see a specialist, or getting approval before you have surgery -- be sure you do it.
Otherwise, you could find yourself paying up to 100% of the bill. And that's no fun.

"If I had known I was going to live this long, I would have taken better care of myself."


Copyright 1994

SOURCE: HOPE PUBLICATIONS


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