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Health insurance is a necessary item for all individuals regardless of overall health. At any given time we as humans are susceptible to injury or illness and should the time come when we are in dire need of health care, we should not have to be faced with the choice of suffering through pain and discomfort because we cannot foot the bill for a trip to the emergency room or urgent care. However, it is also important to understand that not all health plans work in the same way.

Some insurance terms that you should understand:
Copay: A small fixed amount required by a health insurer to be paid by the insured for each outpatient visit or drug prescription. Copays differ in amount from policy to policy and the most common form of copayment is for an office visit to see the doctor. Copayments also apply for outpatient procedures like same-day surgeries, emergency room visits, and as mentioned above, prescriptions.

Deductible: The amount for which the insured is liable on each loss, injury, etc., before an insurance company will make payment. Basically, this means that you must pay your deductible out of pocket before the insurance company will cover any of your medical related expenses. Once your deductible has been met, however, the insurance company will make payment for your medical needs based on a contracted rate. HMO or Health Maintenance Organization: A medical insurance plan for comprehensive health services, prepaid by an individual or by a company for its employees that provides treatment, preventive care, and hospitalization to each participating member in a central health center. HMOs are often the preferred type of health plan because they are so allencompassing.

Some requirements for HMO patients are that they visit only contracted facilities for lab work and specialists, and HMO patients are required to select a primary care doctor for office visits.

PPO or Preferred Provider Organization: A medical insurance plan in which members
receive more coverage if they choose health care providers approved by or affiliated with the plan. PPOs offer health services to members at a “contracted” or discounted rate, and there is usually a split for how much the insurance company will pay vs. how much the member will pay. For example, a PPO might offer a 60/40 split for outpatient procedures where the insurance company will pay for 60% of the bill and the patient is responsible for 40%. PPOs offer more flexibility to members because there is a larger choice of facilities that members can visit and members are not required to declare a primary care doctor. Members who aren’t happy with one doctor can select a different doctor from within the plan’s network.

Contracted provider: It’s important to understand that a contracted provider is a physician or facility that is contracted with (or one who accepts) your insurance.

1. Consider your budget. No matter what your situation is, you must always take
care of your medical needs. At any given point you can be involved in an auto accident, be injured while working around the house, or your health can change due to weight gain or poor diet. Make sure that you always have some sort of health coverage in case of unfortunate mishaps.

While HMO plans are very comprehensive they also tend to cost more. PPO plans tend to cost less but often have a deductible that must be met. Keep in mind that you do get what you pay for and if an insurance plan is cheap that may be because its coverage is minimal. How much can you afford to pay per month? Compare plans within your price range.

2. What are your medical needs? Are you someone who needs to visit the doctor often? Or someone who just needs an annual physical and refills on prescriptions each year? If you only visit the doctor 3-4 times in a calendar year, your best bet would be to find a health plan that has a very low deductible or none at all. If you are someone who needs to visit the doctor more regularly throughout the course of a year, consider a plan with a reasonable copay amount and comprehensive services. With frequent visits to the doctor, you also increase your chances of meeting your deductible in a calendar year, making health care more affordable to you in the long run.

3. Do you already have a doctor or specialist you prefer to see? Find out which insurances that physician or office is contracted with, as this can influence which
insurance carrier you decide to go with. This is especially important if you decide to go with an HMO plan, as you will more than likely have to select a PCP or Primary Care Physician. If you’re picky about your doctor, you need to find out which HMO plans your physician is contracted with and choose a plan that is part of that medical group.

4. Once you have an idea of which carriers you’d like to go with and what type of plan you want, do some comparison. It is also a wise choice to speak with an insurance broker about what you’re looking for and how much you are willing to pay. A good insurance broker will be able to suggest plans that offer the coverage you need at a price you can afford. They are also helpful with answering any questions you might have.

5. Understand that a health insurance company will only cover you if you pass the
application process. The application gives the company an idea of your medical history, and any pre-existing conditions you may have. You must be honest in filling out your insurance application and depending on the information you provide, the insurance carrier may request copies of your medical records for further clarification. Once you are approved, you will information from your carrier and insurance cards in the mail. Be sure to keep your cards on you at all times.