How to Choose a Health Plan
Important considerations in choosing the right health insurance plan for you and your family include the providers available to you, the services covered, and how much it will cost. The following explanations will help you address these concerns. Keep in mind any lifestyle changes, such as deciding to start a family or getting married, that may occur in the next year and affect the insurance coverage you may need.
Types of Health Insurance
Currently, two broad types of health insurance exist. Traditional insurance (also called indemnity insurance) pays for your health care as you use health care services. Managed care insurance assumes a greater responsibility for the health care services you receive. Rather than just paying for your care, managed care plans negotiate fees with providers to help make your insurance more affordable. They also closely monitor quality and utilization of services.
Traditional Insurance Plans
Traditional plans offer the consumer the widest choice of doctors and hospitals. Generally, you pay for doctor visits and submit a claim form to your insurance company for reimbursement. Many preventive and primary services at the doctor's office are not covered by the plan. You must meet a deductible, which means you spend a specified amount out-of-pocket before you can receive payment for services. You are usually responsible for a co-payment, your share of the bill, for certain services after you have met your deductible. Services are paid on a fee-for-service basis, which means preset fees are paid for services defined by your insurance plan. Some participating providers accept as payment in full what is paid by the insurer for services you receive. This is called assignment. Others require you to pay the portion of the bill not covered. This amount is not reimbursed by the insurer.
Managed Care Plans
The three common types of managed care insurance plans include: health maintenance organizations (HMOs), preferred provider organizations (PPOs) and point of service (POS) plans. Because these plans typically cost less than traditional plans, many employers and government programs are giving individuals financial incentives to join a managed care program. In Pennsylvania, Medical Assistance recipients, in particular, are encouraged to join an HMO.
- Health maintenance organizations (HMOs) provide a comprehensive set of basic health care services, emphasizing preventive care such as doctor visits, immunizations, and well-baby care from a specific group of doctors and hospitals. Most HMOs require you to select a primary care physician who becomes your first point of contact with the health care system. These primary care physicians are often called "gatekeepers." If you need specialty services, you usually have to be referred by your primary care physician. Often, you will pay a small co-payment for services and office visits. You also will pay extra to see non-participating physicians.
- Preferred provider organizations (PPOs) contract with a selected group of providers to make their services available to PPO enrollees, usually at a discounted price. PPOs do not require you to use preferred providers, but typically you will pay more to see a non-preferred provider.
- Point of service (POS) plans are a mix between HMOs and PPOs. Like an HMO, point of service plans require you to choose a primary care physician as your "gatekeeper." But like a PPO, you have the option of seeing a non-participating physician and paying a larger share of the cost. Like the HMO, point of service plans emphasize both primary care and preventive care.
Other Types of Insurance
Other types of insurance, such as car insurance and worker's compensation insurance, also may pay for part of your health care if you have an accident. To help ensure that your health insurer will pay for any services not covered by these other types of insurance, inform your health insurer of any accidents as soon as possible. If you are on Medicare, you may purchase supplemental insurance, called Medigap insurance, to pay for services not covered by Medicare.
As covered in the "Types of Health Insurance" section above, traditional insurance plans will pay for services you receive from any doctor. However, managed care plans do not do business with all physicians. Many managed care plans, such as HMOs, will pay only for services you receive from a participating physician. Other managed care plans, such as PPOs, will pay part of the cost if you go to a non-participating physician. To find out if your doctors participate in the plans available to you, check each plan's participating provider directory. Key questions to ask yourself:
1. Does my family doctor participate in this plan?
Your family doctor is the physician you see for common ailments, such as colds, the flu, mild allergies, etc. Family doctors may be listed as family practice physicians, internists, or general practice physicians in the plans' provider directories. Managed care plans call these doctors "primary care physicians" or "primary care providers" or "PCPs," for short. Many managed care plans will require you to see or call your primary care physician before you go to a specialist or to the hospital, unless it is an emergency. Primary care physicians serving in this role are called gatekeepers because they must approve or pre-authorize any services you receive from another doctor, a hospital or other health care professionals.
2. Does my pediatrician participate in the plan?
In many managed care plans, pediatricians are considered "primary care physicians." You will need to find out if the plans available to you allow more than one primary care provider per family; most will allow a family to have a family doctor and a pediatrician as their primary care providers.
3. Does my obstetrician/gynecologist participate in the plan?
Some managed care plans will let you see a gynecologist once a year without your getting approval from your primary care physician. Other managed care plans will consider your gynecologist to be a specialist and require you to get a referral from your primary care physician before you see your gynecologist.
4. Do my current specialists participate in the plan?
Specialist providers are all those providers not considered primary care providers (such as cardiologist, orthopedic surgeon, dermatologist, ophthalmologist, allergist, podiatrist, psychiatrist).
5. Does my preferred hospital participate in the plan?
In all likelihood, the health insurance plans available to you differ in the services they cover. Read each plan's subscriber agreement or membership handbook carefully to answer the following questions.
1. Is preventive care covered?
Preventive care is routine care. Examples of preventive care include well-baby checkups, immunization and booster shots, annual gynecologic exams, physicals and mammograms. Pennsylvania law requires all individual and group health plans to pay for childhood immunizations, annual gynecologic exams and routine pap smears. Although these services must be paid for, some traditional health plans may not pay for the office visit to receive these services. Most managed care plans pay for both the services and the office visit, but require you to pay a small co-payment.
2. Does the plan cover urgent care?
Urgent care is considered care that you need when you have an illness or injury, such as a broken bone. Urgent care is different from emergency care. Emergency care is care that you seek in a life or death situation, such as if you've been involved in a serious accident or if you think you are having a heart attack. Most managed care plans will require that you call your primary care physician before you seek urgent care. If you use the emergency room for what is considered a routine physician visit, you will be responsible for paying the bill. In an emergency, you should go immediately to the hospital and call your primary care physician when your condition has stabilized, or have a family member call as soon as possible. Some plans require that you call your primary care physician within a certain number of hours after admission to a hospital.
3. Does the plan cover other benefits I need?
Other benefits include prescription medications, vision care (eye glasses or contact lenses), dental care and hearing screenings. If your plan covers these services, you probably will have to pay part of the cost of these services with a co-payment. You also may have to meet a deductible before your insurance will begin to pay for these services. If your health plan does not cover these benefits, you may be able to buy separate benefit plans for these additional services. Check your plan contracts to see if there are limitations on the amount of each of these services the plans will pay for.
4. Does the plan cover my special needs services?
Special needs services include rehabilitation, drug and alcohol treatment, mental health care, family therapy, and skilled nursing care. Read your subscriber agreement to see how you get access to these special services. For example, must you see your primary care physician before you can receive rehabilitation care or drug and alcohol treatment? Check your subscriber agreement to see if there are limitations on the amount of each of these services the plan will pay for.
5. Does the service area meet my needs?
Traditional insurance plans generally pay for care no matter where you receive it. Managed care plans generally operate in a given service area. The service area will be described in the plan's subscriber agreement. Typically, you must seek care from participating providers in the service area. If you are out of town and become ill or injured, managed care plans prefer, if possible, that you return home and see your primary care physician. If you are away and have an emergency, you should seek care immediately and call your primary care physician as soon as possible. Managed care plans are required to pay for emergency care you receive out of the service area.
6. Does the plan cover pre-existing conditions?
Some health insurance plans will not pay for services you receive to treat an illness or injury you had before your contract begins. Others will cover pre-existing conditions, such as diabetes, cancer and heart problems, only after a certain time has gone by, say a year or two.
The Plan's Cost to You
Insurance coverage can cost you in several ways. Your company may require you to pay part of the cost of your insurance premium. Usually, you make this payment through payroll deductions-the payments get taken out of your salary before you get your paycheck. You also may have to pay costs for care you receive up to a certain level before insurance will begin to pay. This is called a deductible. In addition, you may have to pay what is called a co-payment (typically $5 or $10) each time you see a doctor, fill a prescription or use other health services. Insurers require co-payments to reduce the likelihood that you will see your doctor more than you really need to. The other cost to consider is if the plan has any lifetime maximum coverage amounts.
1. What is my annual contribution?
Many employers and government programs require you to pay part of the annual premium for your insurance coverage. If you are covered through work, check with the benefits manager in the human resources/personnel department at your employer to get this information. If you are on Medicare, check with your local social security office or call your local Area Agency on Aging to get this information. If you are on Medical Assistance, call your county assistance office or the state Department of Public Welfare to get this information. Your contribution may be different for each insurance plan available to you. Find out how your contribution is collected. Do you pay it at the beginning of the year or do you pay a small amount every month or every paycheck?
2. What is the plan's annual deductible?
How much do you have to spend before each plan will pay for the services you receive?
3. What are the co-payments?
Many health plans require you to make a small payment every time you use a service, fill a prescription, or see a physician. To most accurately estimate your yearly costs, try to estimate how many times you and your family members are likely to visit the doctor, need a prescription filled and use other health services.
4. Does the plan have a maximum coverage amount?
If you become seriously ill or critically injured and need extensive medical care, does the plan limit the amount and duration it will pay for your care? Many plans will put a limit on the amount they will pay for special needs services, such as rehabilitation care, drug and alcohol treatment, mental health care and skilled nursing care. Some plans also may set a lifetime maximum limit on the care for which they will pay.
What Else Should I Consider?
Although many people are most concerned about the provider selection, covered services, and cost of the health insurance plans available to them, other specific plan details may be important in your unique circumstance. Other details to consider include:
- When can I enroll in the plan? (Can I enroll anytime, or do I have to wait for an open enrollment period?)
- What do I do if I'm denied care or are not satisfied with the care I receive?
- How can I switch plans?
- What am I allowed to do if I want or need a second opinion? Who pays?
- What can I do if I'm denied reimbursement for services I receive?
- Is there a customer service representative or department I can call when I have questions? Is the telephone number toll-free?
- Will the plan cover children or other dependents who live or go to school outside the service area?
- To what age can my children be covered by the plan? (Some plans will continue to cover children up to age 25 if they are in school.)
- How much paperwork am I required to complete?
- Is information available on the satisfaction level of patients in the plan?
- How fast are claims paid?
- If the plan goes out of business, am I responsible for paying any unpaid claims?
- Is the plan financially sound? (Private rating agencies, such as A.M. Best, Moody's and Standard & Poor's regularly publish financial information on companies. Financial information on HMOs, PPOs and commercial insurers also is available from the Pennsylvania Department of Insurance.)
- Has the plan been accredited by the National Accreditation Committee on Quality Assurance (NCQA)?
- If I enroll in the plan, will I need extra insurance to pay for services not covered by the plan? (Medicare recipients may find they need, or no longer need, Medigap insurance. Individuals who get their health insurance through their employer may be able to purchase additional insurance for benefits not covered by the plan, such as vision care, dental care and prescription coverage.)
- Where are the participating doctors' offices located? Are they convenient for me?
- What are the participating doctors' office hours? Are they convenient for me?
- What are my options when I or my family needs after-hours care?
- How long will I typically wait to get an appointment with my doctor?
- Will I be allowed to see the same doctor every time I have an office visit?
- Will the plan pay for special services, such as organ or tissue transplants, that may not be available in my service area?