Thursday, February 14, 2013

Types of Health Insurance Plans

There are several main types of insurance plans that may be available for you to choose from, but if you don’t know the differences you may not choose the best fit for your family. And understanding your plan and the lingo will make it easier for you to choose a plan as well.
Here are some of the major health insurance options available
POS – Point of Service – A POS plan is where you have a primary physician that handles your entire care. This doesn’t mean they are the only doctor you see, but they are the ones who give you referrals to other specialist you may need.
Even if the doctor you see is in your network, if the primary care physician (PCP) did not set up the referral, your insurance company will not pay network benefits. The idea behind this type of plan is that one doctor knows everything that is going on with you and your treatments. In theory this is good, but getting referrals is sometimes a hassle for many patients.
HMO – Health Maintenance Organization – No doubt you have heard many horror stories about HMOs yet many people love them because of the low premium and that fact that most have no deductibles at all. It’s extremely cheap for families, but the problem lies within the network and what items are covered.
Most HMO plans have a much small network of doctors and other medical providers, not to mention that going out of state would probably be a medical nightmare. Personally I would never recommend this type of policy but some people must select it because it fits their budget the best.
PPO – Preferred Provider Organization – The PPO plan is my favorite of all because it lets me be in control of who I want to see for the most part. The network of providers for PPOs is very large, giving you a great selection of providers. There is no primary physician and referrals are not needed. You may see the specialist of your choice, but will save money by making sure they are in network. With a PPO plan you will have office copays and deductibles, as well as coinsurance as the example in our chart earlier.
Some other tax saving options
Health Savings Account – The plan of the HSA was to make health cost more affordable for some people. To use this plan you still need a high deductible policy as well. Your employer will offer you this option if available and you simply place money in the HSA account every month. This money is pre-tax money, so it will be deducted before you pay income tax and other taxes. The money in your account can be used for medical expenses such as your deductible and coinsurance. You will not forfeit any money not used in an HSA account. It just rolls over to the next year.
Flexible Spending Account – This type of account you put monthly funds into, just like a HSA, but you will forfeit any money not used at the end of the year. One difference in this type of account is that you can use the money for over-the-counter drugs as well as other medical expenses. This could be anything from Band-Aids to aspirin. Some employers will even issue a debit card for this account to make it easy for you to make purchases. You must keep all receipts to prove you are not using the debit card for anything that is not medical.

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