The cold reality of healthcare in this country is that you do
not have any legal right to it. There are no state or federal
laws mandating employer-paid or -subsidized health benefits. So
if you (or your spouse) have a complete and reasonably priced
health coverage through your employer - BE GRATEFUL... and find
some better use for your time than reading this article. (I would
still suggest saving it - just in case...)
For those who keep on reading, health insurance is available on
an individual or group basis, but don't be fooled by the terms!
INDIVIDUAL insurance usually covers A GROUP of people (entire
family), and many GROUP health plans will cover "a group" of ONE.
In both cases you are the only one paying (individually!) for
the coverage. So, what's the difference? From a consumer's point
of view, the big advantage of group health insurance plans over
individual is that they can't turn you down because of health
problems.
Of course, the ABILITY to get into a health insurance plan is
one thing. The AFFORDABILITY is quite another! Let's begin with
some basic terminology (or should we call it deceptive lingo?)
used in the health insurance industry. Here are major plans with
unique features to consider while making your choice:
HMO - Health Maintenance Organizations
================================
The least expensive, but also the least flexible of all the health
insurance plans.
Advantage:
- Low co-payments, minimal paperwork, and coverage for some preventive-care
and health-improvement programs.
Disadvantages:
- You must choose a primary care physician, also known as a PCP.
- HMO requires that you see only network doctors, or they won't
pay.
- You must get a referral from your PCP to see a specialist.
POS - Point Of Service plans
=============================================
More flexible than HMOs, but they also require you to select a
PCP.
Advantages:
- You may visit a doctor outside the network and still receive
coverage; but substantially less than if you stayed within your
network.
- Offer more preventive care and well-being services, such as
workshops on smoking cessation and discounts to health clubs.
Disadvantages:
- You must choose a PCP.
- If you don't receive permission from your PCP, you're likely
to wind up submitting the bills yourself and receiving only a
nominal reimbursement - if any.
PPO - Preferred Provider Organizations
=============================================
Give policyholders a financial incentive - reasonable co-payments
(also called co-pays) - to stay within the group's network of
practitioners.
Advantages:
- The standard co-payment is $10 for a routine office visit during
regular hours.
- You may go to any specialist without permission, as long as
the doctor participates in the network.
Disadvantages:
- If you see an out-of-network doctor, you may have to pay the
entire bill yourself, then submit it for reimbursement.
- You may have to pay a deductible if you choose to go outside
the network, or pay the difference between what network doctors
charge vs. out-of-network doctor's charge.
FFS - Fee-For-Service plans, also called Traditional Indemnity
=============================================
Offers flexibility in exchange for higher out-of-pocket expenses,
more paperwork, and higher premiums.
Advantages:
- You may choose your own doctors and hospitals.
- You may visit any specialist without getting permission from
a primary care physician.
Disadvantages:
- There's a deductible (from $500 to $1,500) before the insurance
company starts paying claims, and then doctors are reimbursed
about 80 percent of the bill while you pick up the remaining 20
percent.
- You may have to pay up front for medical services, then submit
the bill for reimbursement.
- FFS plans pay only for "reasonable and customary" medical expenses.
If your doctor charges more than the average for your area, you
will have to pay the difference.
Depending on what you choose, you might end up with either EXPENSIVE
or VERY EXPENSIVE plan. Here are some practical ways to reduce
the high (and constantly rising!) cost of health care if you are
unemployed, self-employed or work for an employer that doesn't
offer health benefits:
- If you feel comfortable buying online, you can often save on
broker and agent fees. Sometimes, this will translate into premium
savings for policies purchased over the Internet.
- If you can afford to do so, pay your premiums annually rather
than monthly or quarterly to avoid service fees and to take advantage
of prepayment discounts where available.
- Take advantage of the group buying power. Check out your local
chamber of commerce, trade and professional groups and small and
home business associations relevant to your particular profession.
Many of them offer access to discounted health insurance. Here
are some links:
National Association for the Self-Employed
http://www.nase.org/nase_benefits/health_benefits.asp
American Association of Home-Based Businesses
http://www.aahbb.org/benefits.htm
Home Office Association of America
http://www.hoaa.com/allbenefitsnew.htm
National Business Association
http://www.nationalbusiness.org/NBAWEB/Directory/Internal_
Pages/Member_Benefits/Health.htm
- Increase your deductible. This obviously depends on you risk
tolerance. The general rule of thumb is that by increasing your
deductible from $100 to $2,000 you can cut your premium payment
in half.
- Use new tax laws. The self-employed can write off 70% of their
health insurance premiums in 2002. This increases to 100% in 2003.
- Use Medical Savings Accounts or MSA. Under the Health Insurance
Portability and Accountability Act (HIPAA), self- employed individuals
are eligible for a medical savings account. MSA works nicely in
conjunction with higher deductible health insurance policy to
reduce premiums and allow you to use pre-tax dollars to pay for
your medical expenses. Basically, you reduce your premium by increasing
deductible and use the savings to make fully tax-deductible contributions
to your MSA. You can contribute up to 65% of the deductible each
year into your MSA (75% for families). The money goes into a tax-deferred
account or trust and you pay your medical expenses by drawing
from the account. Once you hit the deductible, of course, the
insurance policy kicks in.
All the above is helpful if you're able to get health insurance
in the first place. What if a pre-existing condition disqualifies
you from getting insurance at any price? There are still some
options to consider.
HIPAA may offer some protections. For more information visit
http://www.hcfa.gov/medicaid/hipaa/content/hipsteps.asp
State-funded high-risk health insurance plans, also known as Risk
Pools, are an important safety net for individuals denied health
insurance because of a medical condition. They're available only
in 29 states though. For more information on risk pools in your
state, contact your state health insurance department, the national
association "Communicating for Agriculture and the Self-Employed"
(1-800-432-3276) or visit
http://www.selfemployedcountry.org
Last but not least, consider possible NON-INSURANCE solutions
to minimize your out-of-pocket healthcare expenses. Through the
various Healthcare Savings Programs you can access the same networks
of healthcare providers (for the same negotiated rates!) that
large insurance companies use. No long-term commitment is required
on your part and the service is available for a modest monthly
fee that is only a fraction of a health insurance premium. To
make them even more attractive, these programs accept all pre-existing
conditions. For example and details see http://www.careentree.com/310559
Finding adequate healthcare coverage might seem overwhelmingly
elusive like hitting a moving target, but learning the basics
and knowing where to start can make the process less painful and
even save you money. No matter which (if any) of my suggestions
you decide to follow, please eat at least one apple a day! Not
for the alleged ability of the fruit to keep a doctor away - just
because it tastes good!
Copyright (C) by Irina 2003.
===========================================================
About the Author: Irina runs home-based business helping people
save on healthcare and create steady stream of residual income
working from home
http://www.megaone.com/hbb/savemoney/
mailto:imakemoney@freeautobot.com
===========================================================
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Affordable Healthcare: HMO PPO POS FFS Health Insurance Definitions
