Comparison of Health Insurance Benefits

Without a basic understanding of how health insurance benefits work, choosing an appropriate plan becomes extremely challenging. In the face of so many plan options and features, picking the best one requires at least a minimal comprehension of the differences between major policy characteristics. By becoming familiar with various medical plan options, you reduce the chances of buying an inappropriate or ineffective policy.

Medically Underwritten vs. Guaranteed Issue

• In most states, premiums for health insurance plans vary based on the extent of medical treatment you have received in the past and are expected to receive in the foreseeable future. People in poorer physical health who will inevitably require treatment and services will pay more for coverage than people in superior physical condition. However, some states banned medical underwriting as a permissible method of determining health insurance eligibility and premium rates. Policies available without medical underwriting are called Guaranteed Issue plans and typically have higher rates due to the potentially increased financial liability faced by the carrier.

HMO vs. PPO

• The two most common types of health insurance plans sold in the United States are HMO's (Health Maintenance Organization) and PPO's (Preferred Provider Plan). These plans represent each end of the managed care spectrum. HMO plans require covered members to seek and receive all medical services from physicians and facilities within an established network of participating providers. Payment for any treatment rendered by a provider not currently contracted with the insurance company becomes entirely the responsibility of the patient. PPO plans, on the other hand, contain provisions allowing members to receive treatment from non-network providers, but at benefit levels far below those for services provided by in-network providers.

Co-Pay vs. Deductible

• The amount you must pay a physician for a standard office visit is called a co-pay, and many health insurance plans require higher co-pays for visits to specialists. Regardless of the actual total cost of your visit, the insurance carrier assumes responsibility for the balance above the co-pay. Deductibles are similar to co-pays only in that both signify out-of-pocket expenses to covered plan members. Usually, deductibles only apply to medical services rendered outside of an ordinary office visit, such as surgical procedures or hospital confinement. The deductible is a pre-determined sum you must pay toward the cost of your treatment before the insurance carrier contributes their portion. Deductibles range from several hundred to several thousand dollars and can significantly impact the health insurance policy's premium.

Gated vs. Non-Gated

• The flexibility of members to freely visit providers other than their general family physician is often a major issue. The specific type of health insurance plan you purchase determines the process you must follow with regard to seeking consultations from physicians other than your family practitioner. HMO's require members to obtain referrals from family doctors before permission is granted for specialist visits. PPO plans, on the other hand, permit members to arrange appointments at their own discretion. The concept of the referral system is commonly described as a gateway that locks patients inside a pre-chosen realm of providers.

In-Network vs. Out-of-Network

• The vast majority of health insurance plans sold in the United States today work on a managed care platform that encompasses networks of physicians and facilities who have previously negotiated service fees with the insurance carrier. Because the carriers already negotiated rates with these providers, they urge covered members to seek treatment only from within the network in order to reduce the likelihood of higher benefit payments. Any doctor contracted with the insurance carrier to accept pre-determined rates, or who has made similar arrangements with the company, is "in-network." Providers who have not negotiated with or accepted contracts from insurance carriers are "out-of-network." Some health plans simply refuse to pay for treatment provided by non-network practitioners, while other plans will contribute.