How to Use Your Health Insurance Effectively

It’s that time of year when many people have new medical plans.  Folks who take the time to learn about their coverage tend to express satisfaction with health insurance.  People who really never look at their policy details until they need to use their coverage are generally less satisfied.  Consider the most popular types of major medical insurance in order to learn the basics.

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How Typical Kinds of Health Insurance Work

The most common major medical plans today are preferred provider organizations and health maintenance organizations.  These are two different kinds of managed care plans.  Managed care plans have become popular because they tend to do a good job of controlling both premiums and out-of-pocket costs.

Preferred provider organizations: For group, individual, and family coverage, preferred provider networks, usually called PPOs, are common.  They use a network of medical professionals to help control costs and simplify claims.  However, people who belong to one of these plans also have the option to seek services outside of the network.  These out-of-network services will still get covered but at a lower rate than in-network services.  Also, this type of plan usually does not require designating a primary care physician or referrals to see specialists.  Because a PPO can offer both savings and flexibility, they offer an attractive coverage option.

Health maintenance organizations: In contrast, a health maintenance organization, or HMO, requires members to seek virtually all of their covered services from the provider network.  The insurer may offer exceptions for emergency services or very rare cases when the network doesn’t have a medically necessary provider on the list.  In addition, an HMO may require selecting a primary care doctor and referrals for covered visits to specialists.  An HMO is much stricter than a PPO, but it may do a very good job of controlling out-of-pocket costs and offer cheaper premiums.

Health savings accounts and high-deductible insurance: This type of plan has two parts.  The first part is a high-deductible major medical insurance policy.  The second part is a tax-favored savings account that can be used to pay expenses before the deductible kicks in.  In some cases, the funds may also be used for medical expenses, like dental and vision, that aren’t covered by the medical plan.  Since contributions to the savings account are deductible, these have become an attractive choice for people who could use another tax deduction and will be disciplined about making contributions to their accounts.

Do You Have Questions About Major Medical Insurance?

Are you satisfied with your family medical coverage? If not, the experienced and independent agents here at Basi can help you shop your local market to find a plan that offers the right benefits and the right price.  Contact us at your earliest convenience for a consultation and price quotes: (209) 847-3065.


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