Choosing the right health plan is important to ensuring both the physical and financial health of you and your family.
With health care costs rising and unforeseen medical expenses looming, anyone without adequate coverage is playing a risky game.
Yet the number of uninsured individuals continues to rise. According to a 1997 joint study by the Employee Benefit Research Institute and the U.S. Census Bureau, approximately 18 percent of uninsured Americans earn more than $50,000 annually.
The cost of a 24-hour stay in the hospital can be several thousand dollars. Even regular trips to the doctor add up quickly. Taking on the financial risk for health care coverage is a burden for both individuals and their employers. Financial strain can lead to stress and have an impact on employees’ ability to focus on their work.
Whether you want to re-examine your benefits or look for new options, closely evaluate what is available and what it means for you. Prior to open enrollment, employers should evaluate the needs of their employees and the type of coverage they want to offer.
What should employers and individuals look for in a health plan? The requirements are similar for individuals who wish to insure themselves and employers who need to find coverage for thousands of employees. Besides affordability, anyone looking for health coverage should evaluate the following:
Choice and flexibility. How much choice does the plan allow in making decisions about health care? Often, at the expense of existing doctor-patient relationships, many health plans restrict choice.
As a result, it is important to seek health plans with more flexible benefits and broad physician networks. A health care company meets the standard of choice and flexibility if you can choose different plan benefits from the same insurer.
Comprehensive provider networks. The plan should offer access to providers at convenient locations. Studies by the American Association of Health Plans show that often people choose a health plan based on whether their own doctor is in the plan.
It’s wise to select a plan with wide networks likely to include doctors currently on your plan.
Financial stability. The financial stability of the health plan is important. No one wants to be associated with a plan that can’t back up its coverage.
Your agent/broker or human resource benefits professional can help with assessments, or check with the State of Ohio’s Department of Insurance if you have questions.
Ease of administration. Most individuals do not have time to pore over health benefits claims. If you are employed in a large company, your human resources department will often include a benefits administrator who can help.
This individual has been educated thoroughly about plan benefits and coverage details, and is just a phone call away. For employers, outside consultants often provide administrative support to your benefits team as a value-added service.
Choose a plan that prides itself on excellent customer service. Insurers such as UNICARE have regional service units that provide personalized service, quick responses to questions, quick payment of claims and representatives who understand your needs. Local contacts provide a quick response from people familiar with your needs.
Cost/affordability. Cost is important to all consumers. It is of crucial importance to new job seekers, or those who are self-employed — two groups that typically have less financial flexibility. Good health plans offer customization and help with administration, both of which affect cost.
Here are a few things to ask about: The lowest rate is not always the best. Check the history of the insurer to make sure the rate is truly competitive and not artificially low to entice customers. If it’s too low, it will probably increase significantly in subsequent years.
Rates are based on anticipated claims experience, others within your demographic and those within your company. A good health plan should be creative to meet your needs.
Know what you’re buying. Health insurance benefits come in many variations, including these common plans:
1. Traditional fee for service: This is the insurance with which most people grew up. It doesn’t tie you to any provider network and, for a predetermined deductible, allows you to go to any doctor or hospital to receive care.
However, since there are no cost or quality control mechanisms built into the plan, costs are hard to contain and there is usually no recourse to settle grievances. Many insurers no longer offer these types of plans, as they are more expensive than a managed health care system. Traditional fee-for-service is, however, still available in some parts of the country.
2. Health maintenance organization: An HMO is a health care company that indemnifies you against the financial risk of a serious illness or injury and provides all your health care services. Under traditional indemnity health insurance, medical providers are paid a fee for each service rendered, which often encourages overuse of services.
HMO physicians are paid a flat monthly fee in advance for every enrollee, eliminating the incentive to use more services than necessary. You receive comprehensive health care through the HMO’s medical facilities or its contract physicians and hospitals. In 1997, HMO enrollment peaked, as concerns about freedom of choice have caused people to move into more flexible plans.
3. Preferred provider organization (PPO): Contracting with independent providers at a discount for services, PPOs offer maximum freedom in choosing doctors, hospitals, and other providers. PPOs generally do not require a referral from a primary care physician to see a specialist, an important consideration for individuals seeking more control over their family’s health decisions.
4. Point of service (POS): This is an HMO that allows you to choose where you receive services. Also called “opt out” or “swing” plans, members are allowed to use physicians and other providers not affiliated with the HMO for an additional fee.
As the economy grows and job opportunities become more plentiful, it makes sense to consider your benefit options more closely. It pays to take the time to explore the possibilities.
Thomas Farro is the marketing director for UNICARE, a national operating subsidiary of WellPoint Health Networks Inc., which serves 7 million medical members and more than 30 million specialty members.
