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The ABC's of Buying Health Insurance
How to make a wise choice
Healthcare delivery options fall into four categories that
are sub-categorized as high or low. The High Option
cost-sharing level requires higher premiums but has lower
deductibles, lower co-payments and lower out-of-pocket
expenses. Lower premiums are an important selling point for
the Low Option, but deductibles, co-payments and expenses are
higher. Each of the following plan categories offers high and
low options.
INDEMNITY
- A fee-for-service (FFS) traditional
payment plan. The covered person and the insurance
carrier pay a percentage of the allowable charge for
the service rendered. The policy holder may choose
the physician, hospital or other healthcare provider
without restriction. Pre-set deductibles are required.
INDEMNITY PPO
(Preferred Provider Organization) - Also a fee-for-service
plan, but the covered person is required to use a physician,
hospital or healthcare provider from the plan's Preferred
Provider list. Usually PPO contracts provide significantly
better benefits in exchange for the policy holder's agreement
to stick to the preferred providers. If you use out-of-network
providers, your out-of-pocket expenses will be higher, and
some services may not be covered.
MANAGED CARE EXCLUSIVE HMO
- These plans do not provide for any out-of-network care
except in emergencies and special cases. There is no annual
deductible, and members pay a flat co-payment rather than a
percentage of the allowed charge. Your care is coordinated by
a Primary Care Physician (PCP) who determines how, when and
where you will be treated, as well as what specialists and
hospitals you may be referred to.
MANAGED CARE POS
(Point of Service) - Plans that combine features of an
Exclusive HMO and an Indemnity PPO. Out-of-network care is
covered. The plan may provide for a primary care physician,
but you will have access to a wider range of doctors, as in a
PPO plan. If you choose to use in-network providers, a flat
co-payment applies; out-of-network care requires higher
deductibles and higher out-of-pocket expenses.
These plans do not affect Medicaid coverage, Medicare
Supplements or Medicare benefits. Plans can be designed to fit
your specific needs and can be purchased through agents or
directly from the insurance carrier. In Kentucky, you can buy
a policy through the Purchasing Alliance, a pool of state
employees, companies with less than 100 employees and
individuals not eligible for group coverage through their
employers. The Purchasing Alliance has chosen 18 of the 29
variations of the standard plans for sale to members. Keep in
mind that not all the plans are offered in all locations.
Before you decide on any plan, be sure to check for exclusions
or services not covered. Some low-options plans have important
exclusions such as allergy testing, contraceptives,
psychiatric therapy and prescription drugs. Don't forget about
those high/low options. Many plans have Economy and Standard
options between the Budget Low and Enhanced High. These
middle-of-the-road plans have different levels of coverage and
may be a better fit for you and your budget.
It's important to remember that you need to know exactly
what is covered in your plan - and what is not. Study your
options and know what is available. Consult an expert. Try to
mix prudence with a dash of foresight as you search for the
plan that is best for you.
If you have questions about the new Kentucky Health
Insurance Plans, ask at your place of employment or contact an
insurance agent. You can call the Purchasing Alliance at (800)
677-7323, or the Kentucky Health Care Policy Board at (800)
787-5472.
Choosing a health-insurance policy
(from Making Sense of Kentucky's New Health Insurance
Plans, by Andrew S. Mickler, MD)
1. Evaluate your current coverage for benefits, exclusions,
out-of-pocket expenses, premiums, etc.
2. Decide on the type of plan you want (indemnity, PPO,
HMO, POS) and the benefit level that fits your needs.
3. List the additional kinds of coverage you feel you need
(e.g., OB, allergy, etc.).
4. Add in the optional features (riders) you want.
5. Check with your agent, employer, or other plan source to
find out which carriers in your area offer the type of plan
you want.
6. Comparison-shop for the best value (taking into account
such matters as high or low option, deductible, co-payments,
coinsurance, maximum out-of-pocket expenses) and check to see
whether the doctors and hospitals you want to use are on the
insurance carrier's list.
7. If the price is right, buy the policy.
8. If the price is not right, you'll have to decide where
to compromise. Re-evaluate the need for optional features,
delivery options, etc., and compare again.
What's covered
Most health-insurance plans cover most of the following
expenses:
- Physician office visits
- Hospitalizations
- Lab work and tests
- Prescription drugs
- Maternity care
- Annual OB/GYN exams
- Mammography and other screening tests
- Contraceptives
- Well-child care and immunizations
- Emergency services
- Home healthcare
- Transplants
- Therapy (physical, occupational, cardiac, speech and
allergy)
- Substance-abuse care
- Mental-health care
A policy holder can often pay extra for supplemental
"riders" to cover the following:
- Dental care
- Vision care
- Obstetrical services
- Mental illness
- Home healthcare
- Substance-abuse treatment
- Prescription drugs
- Durable medical equipment
- Therapy and allergy services
- Fertility services
- Elective abortion
- Nursing facilities
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