Health Insurance Alphabet Soup: What Plan Do I Choose?

In the world of health insurance, acronyms are everything.† But what do they mean?† Navigating your way through managed health care plans can be confusing and overwhelming, even to people who think they know insurance.

First, understand what "managed health care plan" means.† These are plans that negotiate lower prices with doctors and hospitals so that employers can give their employees discounted services.† Most people who have had insurance provided through their employer know that managed health care plans can save them thousands of dollars for even simple medical procedures.

So, there are three types of managed health care plans.† The first is the HMO, or Health Maintenance Organization.† Though the HMO has been vilified by the public as of late, it does offer significantly reduced costs to employees' health care needs.† The HMO negotiates with medical providers to reduce the fees for their services.†

Even though the HMO delivers significantly reduced costs, there are usually specific providers that must be used for the employee to receive the health insurance benefits.† A list of approved providers is often given to the employee or is accessible via the internet.† Often, with the HMO, specialists can only be seen through the recommendation of the primary physician.† But even though your choice of doctors may be limited, the HMO often requires less co-pay or a lower percentage of uncovered service cost for the employee.

Another type of managed health care plan is the PPO, or Preferred Provider Organization.† These plans also negotiate for reduced cost to the employee. Yet, with the PPO the employee can choose any doctor.†

There are usually two lists of doctors with a PPO.† There is the Member Provider, which often provides services at the same cost as an HMO provider, and then there is the Non-member Provider, whose cost to the employee may be a little more.† Though the cost is sometimes higher with the Non-Member Provider, often referred to as an Out-of-Network Provider, an employee has more freedom to see specialists of their own choice without the recommendation of their primary care physician. The downside? These plans are sometimes more expensive than the HMO.

The third type of managed care plan is the POS, or Point of Service plan.† This is similar to the HMO in that the employee would choose a specific doctor, who would work as a gateway to a specialist.† Anytime the employee would need treatment for something specific, the POS doctor would have to be contacted first. The rules with a POS plan can get a little complicated, so make sure that you have a good understanding of how obtaining your services through this plan must be handled.

If you are considering a managed care plan, check out all of the fine print and expenses.† Make sure the plan you choose fits within your budget both when paying monthly premiums and when paying out-of-pocket expenses.† For instance, and HMO is usually less expensive on a monthly basis than a PPO, as it makes sure you are seeing doctors who have agreed to lower costs with your insurance company.

Also, think in the long term as to overall costs and coverage. Ask the insurance provider questions before signing up for a policy.† If the provider balks at answering your questions, or does not want to give you a proper answer, reconsider the insurance company. Also, donít be fooled by lower costs. Ask questions about the ease of filing claims, timely payments and more. Cheaper, when it comes to your health coverage, is not always better. Being an informed consumer is your first step to finding a health insurance policy that works best for your situation.

Health Insurance Alphabet Soup: What Plan Do I Choose?

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