| Buying Personal Health Insurance: How To Find The Plan Best For You |
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| Written by Max Logan |
| Monday, 26 July 2010 15:34 |
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The secret to finding the health insurance plan best for you, the one that will give you the most for your money, really depends on what your needs are. Do you know what you want out of a health insurance policy? Your first step-before you do anything--is to answer that question. Next, it is important to understand that by definition, insurance is a system of risk management. In this case, you want to manage the risk of loss due to health care expenses, and the fee you pay an insurer every month, which is called an insurance premium, is what you pay the company to assume some of the risk of paying for your health care costs.
The secret to finding the health insurance plan best for you, the one that will give you the most for your money, really depends on what your needs are. Do you know what you want out of a health insurance policy? Your first step-before you do anything--is to answer that question. Next, it is important to understand that by definition, insurance is a system of risk management. In this case, you want to manage the risk of loss due to health care expenses, and the fee you pay an insurer every month, which is called an insurance premium, is what you pay the company to assume some of the risk of paying for your health care costs. When you understand that a health insurance plan is essentially a kind of risk management tool, it is easier to understand just why there are so many different kinds of insurances, policies, and plans. People have many different kind of needs, and so in theory, insurance can provide policies to cater to those needs. When you think of health insurance, most of us think of payment for doctor and hospital expenses. Generally speaking, you either buy an individual or family policy, or you might get coverage through an employer or union plan if you are employed and your employer offers health insurance as a benefit. In order for you to know what you are getting, you must know exactly what benefits are listed in the policy and how much the policy will pay out for the benefits listed. Some examples of household names that you are sure to recognize are Aetna, Blue Cross Blue shield, Humana, United Healthcare, Sterling, and Mutual of Omaha. Insurance companies are also known as "payers" because they are responsible for paying out on your insurance claims when need arises. Though there may be a relatively small number of companies with instant name recognition, there are literally hundreds upon hundreds of health insurers, and these are all separate payers offering different policies with different selections of benefits catering to different kinds of insurance needs. There are so many because health insurance is largely managed by private insurance companies regulated by Federal and State laws. Whereas private insurance includes numerous different payers, a single payer health insurance program usually describes a system in which the government manages all health care costs. The government program is the single payer. In the purest form of this, there would be no interaction at all with the private sector. The closest example of single payer health insurance in the U.S. is probably Medicare, the Federal health insurance program for individuals age 65 and older. When Medicare first became law in 1965, the Federal government was the single managing entity and payer. In more recent years, the Federal government has allowed private insurance companies to manage Medicare benefits through private managed care plans in the form of Medicare HMOs (health maintenance organizations), PPOs (preferred provider organizations), and PFFS plans (private fee for service plans). The private Medicare plans are called Advantage Plans, and even though the government still supervises and authorizes the plan, it has allowed other payers to participate in the Medicare program. Health insurance choices can seem to be overwhelming. After all, there are not only many different insurance companies but many different kinds of policies as well. Some examples include, supplemental insurance designed to supplement or add on to an already existing health insurance policy; there is dismemberment insurance, temporary health insurance, hospital only insurance, disease specific health policies, and policies designed to pay only when your total out-of-pocket expenses reach a certain limit. The question of course, is how to do you choose? How you choose a health insurance policy depends on your assessment of your costs, needs, and circumstances. If you need doctor and hospital coverage for specific period of time, then you might seek a temporary policy from Blue Cross or Humana, for example. If you need family health coverage, then you might, hypothetically, seek a comprehensive medical plan from Wellmark, Aetna, or John Deere. Some people take out a policy, to provide another example, from United Healthcare (or some other insurer) to pay only in the event of hospitalization as result of cancer. Other people, who work in a high risk environment, might take out a policy to pay in the event of dismemberment occurring under certain, specified circumstances. The policies can be quite specific and written to answer your specific needs. DISCLAIMER: This article is provided as information only and is not to be taken as financial advice. Learn more about finding the best low cost insurance plan! |