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Will cheap health insurance plans cover everything I need?

retired man with family health insuranceWhether cheap health insurance plans will cover all of your needs is very reliant on what exactly your needs are. One of the cheapest health insurance policies available is catastrophic health insurance, also known as high deductible health insurance. This type of plan only covers major medical events, and does not offer reimbursement for expenses associated with:

  • Regular wellness exams
  • Prescription medications
  • Immunizations

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If you have dependents, or need to see a healthcare provider at least a few times a year, then you’ll need a more comprehensive plan than catastrophic health insurance. You might find that an HMO fits your needs, as it offers more protection than catastrophic health insurance, but doesn’t offer as much flexibility as plans that are more expensive.

How do I know what type of health insurance plan to pick?

Depending on your situation, you may not even have a choice of the type of health insurance plan you purchase. If you receive health coverage through your employer, you might just be provided with one plan from one provider. It is important to understand the differences between the types of plans, if you do have:

  • Choice of plans
  • You’re self-employed
  • Purchasing the plan directly from a health insurance company

Typically, people choose from managed care health insurance solutions, such as HMOs, POS, or PPOs. HMOs are the least flexible of the managed care plans, and the least expensive. With an HMO, you have a limited selection of primary care physicians from which to choose and, if you need to see a specialist, you must get a referral from your primary provider.

You need to get permission from the HMO before you undergo any sort of treatment and, even then, it’s quite possible that the treatment will not be covered. If you choose to see a healthcare provider who is not approved or pre-approved by the HMO, you will have to foot the entire bill yourself.

POS, or point-of-service plans, allow you to choose your primary care provider from its network of approved doctors. The plan is less rigid than an HMO, but you still will usually need a referral in order to see a specialist. If the specialist is in-network, the visit should be covered, but if the specialist is out of the POS network and/or you don’t get a referral before you make the visit, then you will most likely have to pay most (if not all) of the specialist’s bill. Some POS plans will reimburse the cost of the specialist, but you have to pay a deductible first.

The PPO, or preferred provider organization, is the most flexible of the managed care health plans. With a PPO, you have access to a network of providers who charge less for services. As long as you, as a policyholder, stay within that network for your medical needs, you will likely only have to pay a small co-pay at the time of each visit.

With a PPO, there is no need to get a referral to see a specialist, but if you go out-of-network to see a specialist, you might need to pay a deductible before the insurance company reimburses you the cost of the visit. Additionally, reimbursement is typically only 80% of the total cost.

Is there any type of pay-as-you-go health insurance?

There is a type of health insurance plan known either as an indemnity plan or fee-for-service health coverage. Managed care policies have become more popular in recent years, but before that, most people had this type of health insurance coverage.

While not exactly pay-as-you-go, fee-for-service health insurance does allow you the most flexibility to see whichever healthcare provider you want, when you want. You do not need referrals to see specialists and the insurance company won’t decide for you whether that treatment or procedure is necessary or not.

As expected, this independence comes at a higher cost than most managed care policies. With fee-for-service plans, you first have to pay a deductible before the insurance company reimburses you, usually at 80%. The deductibles typically range from $200 to $2000.

Is there anything else I should know before I choose health insurance coverage?

You should also be aware that insurance companies would only pay a provider for the amount they deem reasonable on any given service. Therefore, your best bet to save money is to go to a provider that does not charge outrageous prices for their services.

Knowing your treatment options is one of your best forms of protection. Before you let your insurance company or healthcare provider steer you towards any type of treatment, check out the “Effective Health Care” options on the website for the U.S. Department of Health & Human Services’ Agency for Healthcare Research and Quality.

Remember that only you know what your medical needs will be and we recommend that you talk to an insurance agent or the person in charge of your health benefits at work, in order to determine the best health plan for you.

Whether you want the cheapest health insurance rates or a plan that is more comprehensive, you can compare providers here by entering your zip code.

 

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