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 START HERE - What Health Insurance is Right for Me?
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"My focus is on my business and getting money coming in the door. At the same time, I realize that if I get sick or have a major health issue, everything I’ve worked so hard for would be at risk. Are there insurance products out there designed for someone like me?"

Self-Employed

STEP 2: CHOOSE A HEALTH PLAN PRODUCT AND POLICY THAT BEST MEET YOUR NEEDS.

Once you have prioritized the costs and services you want from a plan, you now need to decide the type of health plan and policy that best meets your needs.

COMMON TYPES OF HEALTH PLANS

What type of health care coverage will work best for you and your family? Your decision will depend on cost, provider choice, and the types of health care services offered in the health plan product.

From a practical standpoint, the cost factor likely will be very important to you. Health plan costs vary greatly. Make sure you understand the costs of the various plans that are available and compare them.

There are two major types of health plan products: indemnity or fee-for-service and managed care.

Fee-for-Service

An indemnity plan allows you to use any medical provider or hospital. You or the health care provider submits the bill to the insurance company, which will pay for part of it. Usually you first pay a deductible and then your insurance picks up the remaining balance.

Once you meet the deductible, most indemnity plans pay a percentage of what they consider the "usual and customary" charges for covered services. The insurer usually will pay 80% of the health care cost and the individual usually pays 20% of the health care cost. The plan may not pay for provider charges deemed higher than usual or customary rates. In this case, the individual pays those outside costs.

Managed Care Health Plans

There are three types of major managed care health plans. These health plans generally provide comprehensive health services to their participants and offer financial incentives for patients to use the providers who belong to the plan. Plan participants often are required to pay a low-cost co-payment for each medical service received. Often a member's health coverage is paid in advance (pre-paid care). Fees and reimbursement for health care provider and hospital services are negotiated when purchasing the health plan.

Health Maintenance Organizations

Health maintenance organizations (HMOs) generally provide participants with access to a fairly strict network of health care providers for services such as preventive care and medical treatments. Although participants do not have to pay a deductible, there is usually a monthly premium, and participants often need to pay only a small co-pay at the time the medical service is delivered and for prescriptions.

The HMO covers 100% of the medical services provided. Participants are often required to select a primary care physician, who coordinates a participant's treatment and who can refer him or her to specialists within the HMO network as needed. If a participant selects health care services out of the "network," he or she usually will be responsible for 100% of the medical care costs.

Preferred Provider Organizations

Preferred provider organizations (PPO) are similar to HMOs in that they offer participants a network of health care providers and require participants to pay a co-payment for individual medical services. Unlike HMOs, PPOs allow participants to seek care outside the network. Using an out-of-network provider, however, typically increases the required co-payment. Also unlike HMOs, PPOs don't require participants to have a primary care physician or a referral to be treated by a specialist. PPOs often require deductibles and have higher co-payments than HMOs, but they also offer a broader choice of health care providers and services.

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Point-of-Service Plan

The point-of-service (POS) plan is a combination of HMOs and PPOs. It offers participants more freedom to choose their own health care providers and services, combined with the lower cost of an HMO.

As with an HMO, POS participants must select a primary care physician within a defined health care network. This physician can make referrals to specialists within and outside of the network. Similar to an HMO, there is no deductible for in-network care, and participants are only required to pay a small co-payment at the time of service.

If medical care is provided outside of the network, the participant will be responsible for first meeting a deductible and then paying for either a percentage of the incurred expenses not covered by the POS plan or the difference between what the health care provider charges and what the health plan deems to be a "reasonable and customary" cost for the service.

COMMON HEALTH PLAN POLICIES

Major Medical

This policy provides benefits for most medical expenses, up to a certain maximum amount, whether an individual receives services in or out of the hospital. It is often referred to as "comprehensive coverage."

Basic Hospital

Just the basics, such as room and board and miscellaneous hospital expenses, are covered under this policy. Expenses related to emergency room care, surgery, outpatient treatment, or non-hospital related health services are typically not covered.

Basic Hospital Medical-Surgical

These policies provide the same coverage as a basic hospital policy plus a benefit for emergency room care and surgery.

Short-Term Major Medical

Short-term insurance is a non-renewable, inexpensive source of coverage. This health insurance coverage has policies that range from 1 to 12 months and is a good option if COBRA is not available and a job with benefits will start within a few months. Plans typically provide lists of doctors who decrease patients' co-payment but allow patients to visit other doctors for a higher out-of-pocket fee. Charges vary, but typically range from $30 to $150 a month, depending on factors that include co-payment structure and deductibles.

Accident Only

Coverage extends only for injury from an accident and excludes sickness. Benefits may be paid for death, disability, dismemberment, or hospital and medical expenses.

Disability Income Protection

This is sometimes called "loss of time insurance." The coverage provides periodic payments to replace income actually or potentially lost when the insured is unable to work because of sickness or injury.

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