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Health InsuranceWhat You Need to Know About Health InsuranceBy Chris
BillSavings.com Brief:
Compare HMOs to PPOs to see which health insurance option may be right for you. For those over the age of 65, learn about Medicare Parts A through D to see which options may be necessary. Once you decide which policy is right, learn about the companies that sell policies.
Especially with the soaring cost of health care today, health insurance is a necessity for most individuals. Luckily, the majority of people obtain a health insurance plan through their employer, which may make the premiums, co-payments, and out-of-pocket expenses much lower than those who have to obtain a policy on their own. For those shopping for a health insurance plan, choosing the best policy takes a little time and research to choose the right plan. Health plan coverage While health plans have many features and exclusions there are five main areas of coverage you need to be concerned with when shopping for a health insurance plan – major medical coverage, choice of health care providers, lifetime maximum benefits, deductibles and co-payments, and guaranteed renewals. Major medical coverage is usually at the top of the list of any health insurance shopper. You may need a plan that covers medical expenses such as hospital stays, visits to the doctor, X-rays, and laboratory work. Second on this list may be the ability to choose health care providers. Being able to choose any doctor you want should not be the deciding factor when choosing a health plan. In fact, a plan that allows you to choose any doctor you want may be very expensive. More common and less expensive types of plans are health maintenance organization (HMO) plans and preferred provider organizations (PPO) plans, which may put some limitations on the doctors you can choose. These types of plans help to keep the cost of health insurance, co-payments, and out-of-pocket expenses down. HMO and PPO plans are more similar than different. The real difference between the two is if you see a doctor not on the preferred provider list, an HMO may not cover the services, but a PPO may still pay the majority of the expense. The third point of interest is the lifetime maximum benefits, which is the total amount that the insurance will pay over the life of the policy. Ideally, you may want to choose a plan that has a maximum lifetime benefit of $5 million or does not have a maximum limit at all. Deductibles and co-payments may be conflicting for health plan holders because the higher the amount of the deductible and the higher the amount of the co-payments, the lower the monthly premium payments. So in order to keep your health insurance premiums affordable you may want to choose a plan with the highest deductible and co-payments you can afford. Finally, you may want to seek a plan that has a guaranteed renewal feature. This feature allows your policy to continue to renew, unless you cancel it, regardless of your health condition and without having to administer to a physical exam. Buying a plan When looking for a health insurance provider, you have a few options to shop for a policy. You can contact health insurance agents, insurance companies, or utilize sites like the Insurance Information Institute at http://www.iii.org/ for more information on the types of policies that may be available to you and where you may be able to purchase a policy. If your employer provides health insurance to its employees, you may not have a choice of the insurer but may be able to choose options for the type of coverage and the features of the policy. If you are self-employed, it may be best to research and compare some of the older and larger health insurance companies’ policies, which may offer more competitive pricing. Another thing you may have to deal with, depending on your medical history, is denial of health insurance. If this happens, contact health insurance companies that offer that do not require a health exam to qualify. You may also seek employment with companies whose health care provider does not require a physical exam, although this should not be the only criterion for choosing an employer. Some states also offer plans to those who cannot qualify for coverage any other way. After age 65 For retirees, or those aged 65 or older, the government offers a health insurance called Medicare. Medicare has four major parts of enrollment:
While Part A Medicare coverage is automatic, Parts B, C, and D are optional. Since payment of the deductible is a requirement and there are co-payments for Medicare services, Medigap insurance may cover the charges Medicare does not. Medicaid may also be available to those who cannot afford to pay for the deductible and co-payments because of low income. This is a state run insurance plan, which may be used with Medigap insurance. Part D coverage was started in 2006 to help those age 65 and over with the expense of prescription drugs. There are restrictions to the program you need to know. It may only make sense to opt-in to this program if you expect to pay more than $5,000 on prescription drugs because you will have to pay the first $3,600 out of your own pocket before Medicare kicks in. Medicare pays 95% of prescription drug costs after the first $5,100. There is also a restriction on enrollment with Part D. If you choose not to enroll, but decide to enroll later, a penalty fee is charged. You may want to enroll in the lowest cost Part D option and then upgrade to a better coverage option, if necessary, to avoid the penalty. For complete Medicare information, visit http://www.medicare.gov/. Another issue that plagues retirees is whether they should buy long-term care insurance (LTC), which covers extended stays in nursing homes. These policies are very expensive and have many exclusions and limitations associated with them. There are more reasons not to buy a policy of this type than there are benefits to buying it. First, most people stay in a nursing home for less than a year, so the cost of a policy far exceeds the cost of a one-year stay. Second, Medicare covers the cost of the first 100 days in a nursing home, as long as certain conditions are met. Third, most individuals have family or friends who can care for them during this period. 8/15/2008
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