Choosing the right healthcare plan can feel like gambling on the odds.
When deciding to purchase private health insurance, individuals should consider the policies' benefits and drawbacks before applying. Owners of private health insurance plans have more control over their coverage options that fit their and their families' needs. However, these policies, which are bought directly from insurance companies, can be expensive, especially for those who have health problems.
Managed Health Care Plans
Managed health care plans seek to provide cost-efficient coverages by controlling health care expenses. Members of these plans are given provider networks -- doctors, hospitals, labs -- in geographical areas that agree to charge discounted rates in exchange for business. Typically in these plans, insureds must choose a Primary Care Physician, or PCP, who acts as a gatekeeper, referring patients for additional care as needed. The three main types of managed care plans are HMOs, where you are covered only for providers within the network; PPOs, where the PCP must be part of the network, but insureds can go outside the network for additional care covered at a lower rate and Point of Service plans where the PCP has the option of referring patients outside the network. Typically these plans have no deductible, but insureds pay a copay, the amount of which varies depending on the service. The monthly cost of these plans will be based partially on the copay amount, with larger copays being less expensive than lower ones.
Indemnity Health Plans
If individuals and families value having control over their medical decisions more, they can opt for indemnity health insurance. Indemnity health coverages are considered traditional plans because they are the first health care policies sold in the U.S. These are fee-for-service plans that reimburse members after paying for their health services. Unlike managed health care coverages, members of indemnity health care plans are not given provider networks; instead they are able to see doctors of their choice without restrictions. These plans typically include a deductible, an amount that the insured must pay before insurance kicks in. The cost of the plan will be largely determined by the size of the deductible, with very high deductible plans often costing less than managed care and very low deductible plans costing considerably more.
Choosing a Plan
In addition to comparing prices, you need to also carefully check what services are covered and where you must go to receive service. If you have a strong preference as to what doctors you see or what hospitals you use, this could be a factor in decided which managed care plan to choose, or if you might even decide to go with an indemnity plan. Cost and age will also be a factor. Younger individuals may want to take a chance on a higher deductible plan on the assumption that they probably won't require as many services as someone in their 50s.
Considerations
Keep in mind that until that part of health care reform is phased in in 2014, private health insurers do not have to accept everyone who applies.Therefore, if you can, you should never drop one coverage before being approved for another. Private health insurance plans are expensive as well. The average cost of private health insurance in 2007 was $2,613 per year for an individual, but some plans can cost up to $12,000, according to SmartMoney. There are a number of websites that allow you to compare plan coverages and costs. Keep in mind that the prices quoted on these sites are a minimum. Once you apply, based on your medical history, the price will often be higher.
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