The health of you and your family is incredibly important, and you should have the certainty that you will be protected before a medical emergency occurs. Individual health insurance providers can confuse you with varying terminology and hidden fees, so you should prepare yourself with knowledge regarding the different types of plans and payment schedules. iHealthCoalition.org recommends that you talk to multiple agencies and get at least three quotes before committing to a policy.
Traditionally, most people have used indemnity plans, which are now often called fee-for-service models. Similar to other types of insurance, you pay a deductible up front and the insurance company later covers the majority of the costs. You have complete autonomy in choosing your doctor or specialist, and you do not have to have visits pre-approved as being necessary. However, there are a lot of out-of-pocket costs with large deductibles.
The remaining types of individual health insurance plans all fall under the category of managed care. The first type under this category is a Preferred Provider Organization, or PPO. PPOs give their policyholders financial incentives to use health care providers within their network, such as lower co-pays. You can easily go to specialists, as long as they are within the network.
Point-of-Service policies, or POSs, emphasize the role of approved primary care physicians. You are required to obtain specialist referrals through this doctor, which often means more paperwork and doctor visits. They do, however, cover more preventative services than other plans.
Health Maintenance Organizations, or HMOs, are the most expensive but least flexible type of individual health insurance coverage. These are usually group plans that have low premiums, but require pre-approval before seeing any specialist or even visiting an emergency room.
There are always more costs involved than just the monthly costs of the individual health insurance, and knowing the jargon in advance will prepare you for any costs above your monthly premium. A co-pay is the fixed dollar amount you pay at the time you receive medical services, usually to the doctor’s office or hospital. Co-insurance, however, is the percentage of the total treatment cost your insurer will pay (check to see if this is only paid after you meet your deductible, the portion you pay before your insurance starts covering anything). Some insurance policies also cover costs associated with disabilities and income lost from injury or illness. Also check on any additional fees for long-term care in your coverage, like nursing homes.
Each type of plan varies, so you should take inventory of your individual needs. Are you currently healthy, or does your family have a history of any types of chronic illnesses? Do you mind limits on which doctors you can see or where you must see them? If you have a physician you would like to keep, or you travel a lot, look for plans with more flexibility. If you cannot handle paperwork, then an insurance plan that requires you to keep track of receipts and apply for reimbursements may be stressful. Finally, look honestly at how much you could pay out-of-pocket in the event of a catastrophic illness, and get the appropriate amount of coverage.