What Are My Choices with Health Insurance Plans?

Nancy used to work with a British software company. Recently, she got married to Nick, a software professional from Boston. They both decided to get settled in Boston. Nick also insisted that Nancy should apply for a health insurance plan with a Boston based insurance company.

It is necessary for every individual resident American to be covered by a health insurance plan. Unlike other countries, America does not have the concept of social medical care. Hence, individuals have to finance their own medical treatments. They cannot expect any kind of help or financial assistance from the government.

At times, medical bills can run into thousands of dollars, especially, if you happen to undergo a major operation or are receiving treatment for a major illness. Similarly, a major accident can stretch the financial capacity of the family and can push them to the brink of bankruptcy.

Going in for health insurance plans will provide you with a protective umbrella that will take care of your medical expenses and shade you from a colossal medical bill, should you meet with a medical emergency.

When Nick and Nancy visited the office of a Boston insurance company, the first question they had to face was, “ What kind of a health insurance plan are you looking for?”

Modern insurance companies offer a variety of health insurance plans that are capable of meeting the varied requirements of the policy purchaser.

Nancy decided to go in for the Free-for-Service health insurance plan, which happens to be a traditional health insurance plan. This particular plan pays the fees for the medical services provided to you by doctors and hospitals. You are free to choose the doctor or hospital from whom you would like to receive treatment.  

Free-for-Service health insurance plans are quite popular amongst the masses. This is because the insurance company does not have any say in your medical treatment. It cannot decide as to whether you stand in need of a particular treatment or not. Similarly, you need not take permission from the insurance company for visiting a particular doctor.

This type of health insurance plan requires the policyholder to pay monthly premiums. On the other hand, the insurance company pays the medical expenses that are covered by the policy. If the policyholder undergoes a treatment that is not covered under his health insurance plan, then the expenses for the same have to be borne by the policyholder himself. Similarly, the insurance company will only pay an amount that it deems to be "reasonable and customary”. Assume that you have undergone a hip replacement surgery. This surgery usually costs around $1000. However, your doctor charged you $2000 for the same. Under such circumstances, your insurance company will pay only $1000. It is you who will have to bear the rest of the expenses.

If a Free-for-Service health insurance plan does not appeal to you, then you can choose to become a member of Health Maintenance Organizations [HMOs] just like Neil, a Boston based truck driver. Experts claim that HMOs offer one of the cheapest health insurance plans.  However, they also tend to be the most restrictive and least flexible of all the health insurance plans.

A HMO member is required to pay monthly premiums and the HMO will cover the expenses related to emergency care, laboratory tests, x-rays, hospital stays, doctors' visits and therapy. However, if you choose this particular type of health insurance plan, you are required to visit only those doctors and hospitals that are members of the HMO. If you wish to seek a treatment from a doctor outside the network, then you will have to finance the same from your own pocket. Most people are attracted to HMO because of the minimal of paperwork involved. HMOs are also popular because they often organize preventive care programs such as immunizations, mammograms and well-baby checkups etc.

An other option that one has in health insurance plans is that of a managed care plan, that also happens to be the choice of Cathy, a Boston based homemaker. In case of a managed care health insurance plan, the insurance company provides you with a list of doctors, medical practitioners and hospitals. The policyholder is provided financial incentives whenever he visits the doctors, medical practitioners and hospitals that are included in the network. However, the policyholder is required to take an approval from the insurance company before getting hospitalized. If he fails to take this approval, the insurance company has every right to refuse to pay the hospital bill.

Then there are Preferred Provider Organizations health insurance plans. This was the particular type plan, which was chosen by Robert, a mechanic, who happens to be residing in Boston. Under this particular plan, the insurance company will pay almost 80% of the medical costs if he visits an out-of-network doctor. However, if he visits a doctor who is in the network, then the insurance company will pay for the expenses incurred but Robert will have to pay a small amount as co-payment each time he visits an in-network doctor. Another advantage of a Preferred Provider Organizations health insurance plan is that one need not fill in any form should one choose to get treated from an in-network doctor.

Point-of-Service is another type of insurance plan. Here the primary care doctor can refer you to another doctor from the network or to a doctor outside the network. If the doctor himself makes the reference, the insurance company pays almost the entire bill. However, if you seek to get treated by a doctor who happens to be outside the network, then you need to pay a co-insurance.

Thus, there are various types of health insurance plans and you need to choose one that covers most of your medical expenses.

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