Individual Health Insurance
Something is better than nothing holds especially true when it comes to buying a health insurance plan for you as an individual or for your family. Health costs are on the rise and with the introduction and availability of the new Obama Health Care Act (referred to as Covered California) it is difficult to forecast the potential problems this act may solve or create. Different parties have different theories of the long term effect of this act.
For the elderly who want to keep their doctor it becomes a question of if their doctor will keep them. Doctors in various states and in various polls state they simply could not continue their practice at the diminishing payment they would receive under the Obama Health Care Act. While the theory is to make insurance affordable and available to the consumer it has done little to lower the costs of a physician’s medical malpractice insurance. While some argue it will increase medical malpractice claims just by the sheer numbers of new patients a physician will see very recent statistics show that the same number of consumers are getting their health care from clinics and emergency room treatment even though they may now have individual or family health insurance at some level under the Covered California Health Act. The main contributing factor to this is that employees do not want to take time from work to see a physician. They may not get paid for that time off or they may work at a job where their work hours are at odds with the hours of a medical office.
A Preferred Provider Organization (PPO) and a Health Maintenance Organization (HMO) are both considered managed health care plans. The difference is how the costs and benefits of the plan are managed. HMO plans differ from HMO plans and PPO plans differ from PPO plans.
So which plan is best for you and your family? It depends on your budget, your health care needs and your overall personal financial condition. Simply put, how much out of pocket money can you afford?
You can choose a plan with a Preferred Provider Organization (PPO) and pay more now to pay less later. You will pay a higher monthly premium but your overall costs for medical care will be lower. What will be lower? Generally your total out of pocket costs, your co-insurance payments and your deductibles. A plan with a Health Maintenance Organization (HMO) most likely will have you paying less now as far as premiums but more later in out of pocket health care costs. If you are in relatively good health and not in regular need of a physician’s services this might be the best way for you to go. I personally think of this as coverage for a catastrophic medical event in my life.
Before we segue into the pros and cons of each managed health care plan I want to put aside a common misconception consumers have as it relates to a PPO. A PPO does not mean you can go to any doctor at any time and still have perfect coverage. The PPO does have a network of their "preferred physicians”. This means the physicians in their network have agreed to the type of service they will provide and the cost of that service. Under a PPO your health care is limited to the physicians in that particular network. To go “out of network” can cost you more or it can cost you the entire amount depending on the PPO provider you have. This is where as I stated earlier PPO plans differ from PPO plans.
HMO or Health Maintenance Organizations require that you choose a primary care physician or PCP. This is mandatory for coverage to be effective.
This is your primary doctor and the person you will see first for treatment or diagnosis if applicable. Sometimes your doctor is already a member of the HMO you choose. If they are not then you need to choose a new physician. If you have the needs of a specialist then your PCP (primary care physician) will refer you to one that is a member of that particular HMO network.
Another difference between the HMO and the PPO plan is a California PPO or Preferred Provider Organization allows you to see any doctor or specialist as long as the doctor or specialist is in their network. You do not have to choose a primary care physician or PCP and be referred as in the case of the HMO plan.
Your “out of pocket” expenses vary from plan to plan and provider to provider. Most plans will have a deductible, a co- insurance payment (referred to as a co-pay) and a total out of pocket limit for an annual term. Some HMO plans do not have a deductible. Not all organizations consider your deductible or co- pays to be part of your total out of pocket expense. Some organizations do not consider co-pays on prescriptions for example as a credit against your out of pocket expenses.
Another health insurance plan you might want to consider is the Exclusive Provider Organization or EPO. With this plan you are restricted to the services of the providers in the network. While there are absolutely no out of network benefits in this type of plan there are other benefits. Cost is one of them. An EPO can result in lower premiums depending on your age and general health. If you need to see a specialist you do not need a referral from a primary care physician as unlike the HMO plan there is not a designated primary care physician. As long as the specialist is inside the network you can schedule your appointment with them and engage their services.
When you are considering which health plan to buy look for side to side comparisons of your available options. That will help you to determine which plan is best for you. And always, always set aside your total out of pocket amount into a savings account or emergency use only credit card so it is available for you when you need it. I find that medical expenses run a close parallel to Murphy’s Law. They are usually sudden, costly and unexpected and you never have the funds to begin the treatment you might desperately need.
Your knowledgeable agent at EZ Center Insurance Services can guide you through this valuable but sometimes confusing process.