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Understanding California Health Plan Options

Health insurance is imposing, it's intimidating, it's scary and it's hard to understand. If this weren't the case, more people would have health care. It's not just the money, it's the confusion that goes along with health care that keeps people from getting the coverage that they need.

Be that as it may, getting that coverage is important. Here's what you need to know to get started on the road to getting sufficient health insurance:

Health Insurance: In Plain English

We think of health insurance in terms of "if we get sick, these guys will help to cover the costs," but it's not always that simple. It's more or less an accepted truth that the American medical insurance system has a lot of problems that we need to get through, but in the mean time, it's important to make sense of the system that's currently in place.

In order to get your bearings while exploring health insurance options, it's important to understand these five key points of reference:

1. Doctors

Different medical insurance providers will provide you with a different list of doctors that they are associated with. Some plans allow you to see your own doctor, but the majority of insurers would rather that you go to a doctor that they offer.

2. Premiums

The premiums are what you pay every month in order to keep your insurance policy going. Premiums can be dangerous. If you never need major surgery or medication, you could wind up paying thousands of dollars a year for a couple of hundred dollar checkups, and that's simply not fair. Low premiums are very important and so is quality coverage. Some plans will have you paying hundreds a month without even covering doctor visits or any expenses under $2,000 or so.

3. Medical Bills

The main reason to buy health insurance in the first place: Big medical bills. Most of us cannot afford spinal surgery, extended hospital trips and life saving medication, but with health insurance, there's hope.

4. Small Medical Costs

Some users choose to cover smaller medical costs out of pocket. Things like check ups and minor treatments and so forth. This is a personal call, but it should be clear where the advantage lies for, say, a working parent who covers their whole family under one low monthly bill rather than pay a half dozen small bills every month.

5. Prescription Costs

Prescription costs can add up more quickly than you expect. You're not buying the chemicals in the bottle, you're buying the thousands of hours of research and education and development and training that created the chemical compound in that bottle. True, a lot of miracle breakthroughs do happen by accident, but they're expensive accidents, and we have to pay for them.

Developing Your Health Insurance Strategy

With the information listed above, you have a basic understanding of the lay of the land and from here you can develop a strategy that works for you. Now, here's where it begins to get a little complicated:

1. Managed Care

Managed care is essentially a discount: Whatever you need, wherever you go, your health insurance will pay some of your costs. This makes sense if you're single with decent income or savings but may become expensive if you have serious medical issues or family expenses.

2. HMO

An HMO, or Health Maintenance Organization, is a framework that assigns you to a single doctor who covers all of your basic needs as primary care giver. He or she also helps to arrange other needs you may have. The downside to this is less choice, but the upside is much lower costs for major expenses. Worth considering if you need to save money.

3. PPO

PPO is basically a volume discount that the doctors themselves are giving you. By being signed with insurance company X, you get the discount that the doctor gives all of company X's customers in exchange for bringing him or her a steady stream of patients, so that $100 check up now costs $50.

4. EPO

An EPO is an Exclusive Provider Organization. There are some upsides to this plan such as lower cost, but you have absolutely no benefits if you go outside of your primary network of caregivers, so you may find yourself totally unable to cover certain major expenses.

Making Sense of it All

Confusing? Sure, but necessary. You need to form a basic understanding of all of this to provide yourself or your loved ones with the appropriate coverage. Take the time to familiarize yourself with these terms, talk it out with an insurance provider and determine which plan works best for you.

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