Compare Policies and Choose the Best Option
With the enormous variety of healthcare providers and insurance providers out there, the confusion felt by many is only worsened when they come to realize that there is also a large variety of coverage types that they can sign up for. Not every doctor's office works with every plan and not every product is offered by every health insurer.
Confused yet? Well when you're looking to get some price estimates for comparison, you should know a bit about what you're applying for before you apply, and in keeping with that, we have set up this page to give information about the three major types of policies you are likely to run into, what they mean, their advantages and disadvantages and how they work.
- Preferred Provider Organization (PPO): A PPO policy offers plenty of flexibility in choosing your doctor, your care, and treatment options by letting you decide - within a specified network of providers - who you will see for care and when. If you feel you need to see a dermatologist, it is your decision to visit one. Your visit will be covered by copays as long as the doctor is in the preferred provider network, and the cost of treatment will be handled under the terms of your agreement. You have the option of seeing a doctor that is not within your network of providers as well, but you will pay more for the visit and for your treatment if you do.
The PPO option is great for individuals who do not - for various reasons - want to be saddled with a single doctor or provider for their healthcare. The major disadvantage to this product is the price - they are typically more expensive than the HMO option because it is more difficult to control costs when you allow customers to see expensive specialists at will.
- Health Maintenance Organization (HMO): The HMO product offers a great option for those who feel more secure under the care of a primary care physician who oversees all of their medical treatments. Under the HMO, you are placed with a doctor of your choice (within the agreement), who will be your regular physician and make recommendations regarding your care. If you need to see a specialist you will first need to get a referral from your primary care physician (PCP). The HMO option usually costs significantly less than the PPO one when it comes to premiums and additionally, doctors visits will often require a small fee as with a PPO, but treatment and prescriptions are often completely covered by the agreement.
- Health Savings Account (HSA): If you are the strong, independent type that doesn't even want to deal with monthly premiums and copays, then the health savings account may be the best option for you. Whereas with a PPO or HMO strategy, your cost for medical treatment may be around 20% while the insurance company picks up the other 80%, with an HSA, the payments between the insurer and you are going to be more balanced - perhaps 50/50. This is because under and HSA, you do not pay monthly premiums to the provider that they keep whether or not you actually get sick or need to see a doctor that month. Instead, money is deducted - tax free - from your paycheck and placed into a savings account for you, it is your money That accrues interest and grows much like a regular savings account. Then, when you need to buy medicine, you buy it out of this HSA account, or if you need to see a doctor, you pay for much of the cost out of this account. Ideal for young, single, healthy individuals, the HSA is an option that doesn't take the 'what if' approach that is basic to all types of policies - rather, it encourages saving for a rainy day. The HSA has become increasingly popular in recent years thanks to the substantial savings that employers can realize by simply offering a match for deposits into an HSA, rather than paying for a full-blown insurance offering for all of their employees.