10 Tips For Choosing A Health Plan
Choosing A Health Plan
By Richard Trubo
Reviewed By Brunilda Nazario
In earlier times, selecting a health plan was a relatively simple process. Your employer offered to enroll you in the company plan, and once you signed on the dotted line, most of your healthcare expenses were covered.
But times have changed. For many people, choosing health insurance feels like a high-wire act, where even a single misstep might send them into a free fall if illness strikes.
Managed care is still the name of the game for many consumers, forcing them to make sense of the alphabet soup of healthcare delivery systems, most commonly HMOs (health maintenance organizations) and PPOs (preferred provider organizations). While HMOs limit you to a network of approved physicians and hospitals, PPOs give you the opportunity to use healthcare providers outside the network, typically at a higher cost.
To complicate matters, the cost of coverage is climbing rapidly enough to leave many wallets screaming for mercy. Estimates predict increases in health-plan premiums of 12% to 15% in both 2002 and 2003, according to the Health Insurance Association of America (HIAA). In many plans, patients are also facing higher out-of-pocket expenses for their medical care, such as increased co-payments and hospital deductibles, due to soaring prescription drug costs and rising hospital and doctor fees.
"Clearly, managed care succeeded for a number of years in holding down costs," says HIAA's Randy Clerihue. "But there was a consumer backlash because folks didn't like to be told that they had to get multiple referrals to see a specialist. So there has been a noticeable relaxation of rules within managed care, and some resurgence of PPOs."
Even if you're among the majority of Americans who obtain your health insurance through your employer, you'll need to choose from among the plans being offered, and make sense of the scope of the coverage and how much you'll be paying out-of-pocket. "Misunderstanding and misinformation are a big part of the problem with health plans today," says Rhonda Orin, a partner with the law firm Anderson Kill & Olick in Washington, which specializes in policyholder cases against insurers.
Unfortunately, you can't always count on your employer's benefits department to incorporate only the best possible plans into your employee benefits package. "A lot depends on how skilled these people are, and how concerned they are about their employees," says Paul Lerner, a consumer advocate and author of Lerner's Consumer Guide to Health Care. "Some look primarily for the plans that are the cheapest."
As a result, you need to practice your own "planned patienthood," as some doctors describe it, comparison-shop to make sure you're selecting the right coverage for you and your family. "The average person spends only about 16 minutes looking at health-plan materials before he or she makes a decision," says Lerner. "It would be worth spending more time than that."
Guidelines for Optimal Coverage
To help you navigate successfully through the health-plan obstacle course, here are some key issues to examine:
Published Oct. 21, 2002.
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