If you get coverage through your job, your employer picks your
insurance and you may or may not get any choices about it. If you
buy your own, you're in charge but your choices are limited by the
plans available to individual purchasers and by how much you can
afford to spend.
Unfortunately, there's no such thing as standard coverage.
Details vary enormously from one plan to another. The best
value is not necessarily the plan with the cheapest premium or
the one with the most benefits. It's the plan that covers the
health services you want and need for the lowest out-of-pocket
expense (see "types of insurance"). In essence, differences among
plans come down to three intertwined elements: benefits, costs
and restrictions.
Benefits: Every insurance plan will cover you for doctor and
hospital bills, with various limits, discussed below under "costs."
Virtually everything else, including prescription drugs, glasses,
psychotherapy and preventive care, such as immunizations and
screenings, may or may not be covered, depending on the specific
plan. To figure out how well a plan suits your needs, first make
a list of the health services you and your family normally use.
For each plan, note the amount of coverage for each of those
services -- for instance, "100%," "80%," "not covered." Once you've
got a handle on how fully each plan covers your health needs, you
can evaluate cost differences
Costs: If you don't use many medical services, your primary cost
for indemnity coverage will be the premium. If you do
use a lot of services, it will be hard to gauge your actual costs,
since you must factor in the deductible, co-payments, and any
excess charges or uncovered services. In contrast, cost is easy
to gauge with a true HMO -- a managed-care plan with no
out-of-network option. Once you've paid your premium, nearly
everything will be covered and you'll be liable only for small
co-payments. Estimating the cost of a managed-care plan with an
out-of-network option is tricky, because your ultimate cost depends
on whether or not you actually go out-of-network. If cost
considerations make you lean toward a managed-care plan, read
its literature thoroughly to decide whether you can live with
the restrictions it imposes.
Restrictions: Generally speaking, a managed-care plan
will limit your choice of providers and require you to get
pre-approval for services. If your beloved pediatrician shuns
HMOs or you have a difficult health problem, you may decide that
you can't abide limits like these. Keep in mind, however, that
indemnity insurance also comes with limitations in the form of
deductibles, co-payments and uncovered services. These financial
roadblocks can inhibit freedom of choice as much as any
managed-care bureaucracy.
Another worry about restrictions is that many consumers equate
freedom of choice with medical quality. They're not entirely wrong.
If you receive poor treatment in a managed-care plan, it's hard to
vote with your feet. However, they're not right, either. The quality
of medical care varies considerably both in and out of managed care.
In fact, the best managed-care plans offer quality advantages you
won't get outside managed care, such as outreach for preventive
services, heath-risk screening and coordination of care.
Whether you choose indemnity insurance or managed care, it's wise
to check up on your providers in advance. One way is via state
insurance department Websites. Florida, Maryland, Massachusetts,
New York and Rhode Island, for instance, post lists of local doctors
who have been disciplined for poor patient care or, in some cases,
criminal conduct. New York and New Jersey rate local hospitals and
doctors on how well they care for cardiac patients. Florida, New
Jersey, New York, Maryland, Texas and Utah rate local managed care
plans. Nationally, the
Joint Commission for the Accreditation of Health Organizations
is the major rating group for hospitals, the
National Committee for Quality Assurance
rates managed-care plans and
thehealthpages.com
lists surveys and other data on selected health plans and health
services. If the insurance plan you prefer seems unaffordable,
check the money-saving strategies in the next section to see if
there's a way to reduce your costs.
Next: Money-saving strategies