Illness and injury are unavoidable parts of life. These life events will often require that you seek medical care. The average American racks up nearly $8000 in medical costs each year. The medical costs associated with surgery, prescription medicine and other types of health care can be significant. Health insurance can help keep those costs from being overwhelming.
In some cases, medical insurance is paid for by your employer. In others, you are responsible for the coverage yourself. Most older Americans have part of their health covered provided by Medicare, and must purchase supplemental coverage to pay for the rest. There are a number of different types of health insurance available. Which one is the best choice depends on every individual’s circumstances.
One common type of health insurance is the health maintenance organization, better known as an HMO. In an HMO, an insurer contracts with a number of health care providers. You, the insured, are able to see only the providers who are included in your HMO network. You pick a primary care physician who is, as it sounds, your primary contact for health care. You will need referrals from this provider for any diagnostic tests you require, as well as any visits to a specialist. Non-emergency health care provided by someone who is not part of your HMO’s network is not covered by these plans, and you will have to pay for that care out of pocket. These plans come with some limitations that some people find to be too onerous, but, tend to be less expensive health insurance plans.
The other most common type of medical insurance plan is a preferred provider organization or PPO. As with an HMO, your health insurance provider will give you a list of health care providers with whom they have contracted. However, this list is merely one of preferred providers. You still have the option of seeing doctors who are outside your health insurance company’s network and having the visits covered. However, the coverage for those visits will be different. When you see a physician who is in your insurance company’s network, your costs will be lower. You will usually only have to pay your agreed co-pay and any deductible. When you see an out of network provider, you will have to pay out of pocket and be reimbursed at a lower rate than would be covered for an in-network provider. You are also not typically required to get a referral to see a specialist. However, many specialists still require a referral from a general practitioner before they will see you.
Within these main types of plans, you can also choose how much coverage you want, and how much you are able to pay for. Plans that have low deductibles and low or no co-pays typically have higher premiums. You can get a lower monthly premium by choosing plans that have higher deductibles and co-pays. Which plan works best for your will depend on how often you feel you will need medical care and how much you feel comfortable paying out of pocket. Compare many plans before choosing so that you can find one that suits all of your needs.