The Health Insurance Maze: What You Need to Know

Every year when you enroll in a health plan, it seems like you need to relearn the decision-making options so you can choose a plan. There are terms, deductibles, and choices galore. Should you enroll as an individual or as a family or a couple?

With nationwide changes in health care plans potentially going into effect this year, all you can do is to deal with the forms, make decisions the best you can, and choose something that will suit you and your family. When something can protect your health and dips into your paycheck each month, becoming as knowledgeable as possible is worth the time and trouble.

Know the Lingo and the Consequences

Even if you receive health insurance through an employer, you know that they are going to ask you which health care plan you want. A generous employer covers the cost for employees. Most employers cannot afford to be so generous, but might consider paying a portion of the cost.

How do you become knowledgeable so you can make better decisions?

Here are some terms that you will find helpful, plus suggestions with an if/then approach to making decision on health plans:

Consider Who You Will Cover With Your Plan

If it’s just you, then that’s an easy decision. A couple could potentially each receive insurance through separate employers and not insure the other person at all. With a couple who are not married, but want to check whether they can insure their significant other, they might need to investigate what is available for them.

And, how about children? Plan to cover your children’s health care since children are prone to infections, injuries, and oddball symptoms that might land you in emergency wards to figure out what the culprit is.

“Premium” Is Prime — for the Insurer

The cost to you and your monthly budget will invariably be higher than you hoped for and expected. Actuarial tables that statistically evaluate health probabilities and life expectancies will determine what kind of rate you’ll be paying are very much tailored to every person.

Do you smoke? You’ll pay more, since you might die sooner and the insurance company will need to pay out soon on health problems. Do you live in certain areas that have higher rates of health issues? (Think Love Canal and other areas where residents suffer health problems.) Do what you can to lessen the risks in the ways you live to make your health insurance less costly.

Paying Deductibles and Coinsurance

Once you’ve paid the monthly premium, you are just beginning. If you need to see a doctor, when the visits ends, the provider is going to charge you all or most of the cost if you haven’t been sick much. The deductible, what you pay directly to the medical provider, will usually include a level of services that must be paid for before the health plan will cover charges or reimburse.

Review the “deductible” for your plan. You don’t want to receive a shock when you receive medical services and they tell you that the entire bill is on your head to pay. For instance, when you go to a foot doctor for pain, and you haven’t had any other medical visits yet that year, you might be required to may for all the services. The higher the deductible, typically the lower the premium.

After you’ve paid the annual deductible, money that is due beyond the deductible threshold is partially paid in a ratio of something like 80 (insurance plan) to 20 (your cost) — and that is called co-insurance.

HMOs and PPOs

These are the organizations that provide the medical services you might need. An HMO (health maintenance organization) uses medical providers and requires you to choose a “Primary Care Physician” who can then refer you to specialists in their network. A PPO (preferred provider organization) works with a network of medical providers to contractually provide lower costs. This makes it possible for you to choose who you want to see without a primary care physician’s referral.

Networks — Are You in or out?

What raises your medical cost is when you prefer a physician or medical service that is not part of the network of approved providers or services. For example, if you prefer to see a chiropractor, the health plan may not have the same level of coverage if they choose to limit what they may cover for those services. A doctor who is not contractually part of the network may not be able to offer you the same rates. If you have respect for doctors in the network, use them to save money.

Being covered by health insurance is important. Figure out in advance what you’ll need and review the doctor and medical plan options beforehand so you don’t waste time and money when you really need the health care. And, don’t forget about 911 when you really do have a health emergency.