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How to Determine Individual Health Insurance Plans

By Edited May 18, 2016 0 0

May years ago it used to be relatively easy figuring out how to determine individual health insurance plans, there just weren't that many to choose from. Today we're inundated with choices and with the healthcare changes that are coming the choices are about to get more expansive.

An Individual Health Plan is one in which the insured is unemployed, self employed or their company doesn't provide health insurance. If you fall into one of these categories you'll need an individual health plan.

Everyone has their own criteria for how to determine individual health plans and there is no one size fits all solution (unless you have loads of money!) in which case you probably wouldn't be here. Because of this you need to leery of finding yourself under covered or paying for services you may not need and that's the first place you should start – determining what you need and what you can afford.

So how do you reconcile need vs. budget? This may actually depend a lot on your place in life. As most twenty-something's tend to be relatively healthy compared to those approaching retirement this could have a relevant impact on the coverage you need and the plan you choose. Chronic illnesses aside, younger people visit the doctor less and generally have a lot less testing done compared to someone 30-40 years older.

Determining your personal needs for a health insurance plan should with start with asking yourself some of the following questions: Do you have a chronic illness? Do you have any pre-existing conditions? Do you have any dependants? Do you visit the doctor often? What is your monthly budget for healthcare such as prescriptions or expenses outside of your plan? Do you have a favorite doctor that you'd prefer to stay with? Do you expect to need dental care? Vision care?

Understanding the answers to these questions will help you determine an individual health plan as the plan you choose will affect many things and not all plans are built the same. As the topic you're dealing with is your health - you'll use the answers to these questions to find a quality health provider.

The mark of a good quality health plan provider is one that provides services when and where you need them. It's one that is interested not just in treating people when they're injured or ill but provides preventative care as well. It's one that has a solid customer service rating from its members and one that is available to answer your questions clearly and concisely when you ask them.

So what are your choices? Generally speaking they are Home Maintenance Organization (HMO), Preferred Provider Organization (PPO) and Point of Service (POS) plans.

HMO's - These are generally lower cost health plans that have limited choices for the member. You'll be asked to choose a Primary Care Physician (PCP) who will act as something of a gatekeeper in facilitating all your health needs. Should you have a need he can't address that requires the consultation of a specialist you'll need your PCP's referral to do so.

The disadvantage is that choices must be filtered through a doctor who may not agree with your personal wishes. It can also be time consuming and burdensome going through the, "chain of command" to get what you really want or need.

A benefit though is that your care is managed by a single individual with whom you can develop a good relationship with in managing your care.

HMO's utilize a network of participating physicians and hospitals. In order for your services to be paid, you must stay within the confines of the network. Visiting a doctor or hospital out of network could result in you paying the entire bill.

Co-pays are typically low so if you need to visit the doctor regularly, this may be a good option for.

PPO - In this healthcare scenario doctors and hospitals have made agreements with the insurance company to offer substantial discounts. These discounts are passed along to the patient base thereby increasing the number of patients. This in turn provides a greater patient stream for the doctors.

Typically with a PPO no primary care physician is required and patients are free to seek the care of a specialist without a referral. Like HMO's PPO's typically have a network of doctors and hospitals as well with visits within the participating network being paid at a substantially higher rate than if you visit a doctor or hospital that's out of network.

POS - This type of healthcare combines the elements of both HMO's and PPO's. You will choose a primary care physician (PCP) and go to in network doctors and hospitals to minimize expenses. There will be a small co-pay when seeking healthcare within network and generally no deductible.

If however, you go outside of network you will first have to meet a deductible and co-pay significantly increasing the cost. In this way POS's create a strong incentive to stay within network but does not forbid doing so in much the way an HMO might.

Most of these types of health plans cover medications up to a certain co-insurance amount which can vary based on the provider. These are typically scaled on whether the drug is generic, brand name or "experimental" paying different amounts based on the type or in some cases none at all.

While the law regarding acceptance is due to change - as of the writing of this article some insurers may require proof of good health before extending coverage and may refuse or reject you based on certain health conditions you may have. Some states regulate this and require insurers to offer insurance regardless of your medical problems. Other insurers may also require you undergo a medical exam before they extend you coverage. Check with the insurer and your state to be sure on these facts.

Making the choice can be a difficult one. Writing down the pro's and con's of each insurer as well their costs will help you visualize their differences. Remember that individual health plans are typically more expensive than group health plans so expect to pay more.

Do your research. Ask questions, make your comparisons and when you find one that provides the greatest benefit and still fits within your budget you can make an informed decision that will protect the health and future of you and your family.

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