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How to Pick a Health Plan

If your employer gives you a choice of plans or you need to purchase your own coverage, it is crucial that you understand the options offered in full in order to choose the insurance that meets best your and your family's needs. Whether you end up choosing an indemnity plan, PPO, POS, or HMO plan, there are a number of important things to consider in choosing the right one. These include affordability, services offered, exclusions and limitations, choice of providers and locations, and quality of care.

Here are some questions you should ask yourself when choosing a health insurance plan:

  • Can I afford the cost of care:
    • What is the monthly premium I will have to pay?
    • Do I need to insure most of my medical expenses or just the large ones?
    • What deductibles will I have to pay out-of-pocket before insurance starts to reimburse me?
    • After I've met my deductible, what percentage of my medical expenses is reimbursed?
    • If I use doctors outside the insurance company's network, what is the cost coverage I get?
    • What is the copayment/coinsurance?
    • What are the out-of-pocket maximum and lifetime maximum?

  • Does the insurance plan cover the services I usually use?
    • Are the doctors, hospitals, laboratories and other medical providers that I use at present in the insurance company's network?
    • Does the plan allow me to use a doctor outside the network?
    • Will it be easy to change Primary Care Physicians if I decide to?
    • Do I need to get permission before I see a medical specialist?
    • What are the procedures for getting care and being reimbursed in an emergency situation?
    • Does the plan cover a pre-existing medical condition, if I have any?
    • If I have a chronic condition such as asthma, cancer, AIDS or alcoholism, how does the plan treat it?
    • Does the plan cover the prescription medicines I use?
    • What types of care or services are not paid for by the plan? (these usually are called exclusions)
    • Does the plan reimburse alternative medical therapies such as acupuncture or chiropractic treatment?

  • What is the quality of the insurance plan I'm being offered? Ask your employer or insurer for a HEDIS (Health Plan Employer Data and Information Set) report. It may give you the answers to some of the questions below:
    • How have independent government and non-government organizations rated the plan? For example, the National Committee for Quality Assurance issues a Consumer Assessment of Health Plans (CAHPS) report for every medical plan and facility.
    • What kind of accreditation has the plan received from groups such as NCQA, the Joint Commission on Accreditation of Healthcare Organizations (JCAHO), or the American Accreditation HealthCare Commission/URAC?
    • How many patient complaints were filed against the plan last year and how many were upheld by state regulatory agencies like the state insurance commission or the state medical licensing board?
    • How many members and doctors leave the plan each year? Check with the state insurance departments, which keep track of these so-called disenrollment rates.
    • Do the doctors, pharmacies and other services in the plan offer convenient times and locations?
    • Does the plan pay for preventive health care such as diet and exercise advice, immunizations and health screenings?
    • Ask your friends and colleagues about their experiences with the plan.
    • Ask for your doctor's opinion of the plan.
    • Ask your employer for a "report card" that grades the plans.

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