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Part II: Selecting A Plan

Part II: Selecting A Plan

Many factors should be considered before choosing a health insurance plan. Buying insurance is a very important decision, and it is essential to have as much information as possible before a particular plan is chosen. A good decision requires accurate, easy to understand and complete information.

An inventory of your particular health needs is an important element in choosing a health insurance plan. Your family's personal health history should serve as a basis for determining services you will want to purchase. For example, if you have a child with allergies or a spouse with cancer, you may want to explore specific health care benefits that the health insurance plan will provide such as a referral to a specialist. Chronic family disease patterns such as diabetes should be considered when you select coverage benefits.

Written information about the types of plans available and details about each plan should be available from either your employer or the benefits manager for your company or from your plan. The insurance company may provide a handbook that describes your benefits. For any areas not understood or points that are not clearly included or explained, call either the employer's benefits manager or the member services department of the insurance company. Get answers in writing. Ask for toll-free telephone numbers for the insurance company. If you have a choice among various types of managed care plans, such as an HMO or PPO, use consistent criteria for comparing plans.

In an effort to control costs, HMOs may offer limited choices and benefits to the insured which may be more restrictive than Preferred Provider Organizations or fee-for-service medicine. On the plus side, HMOs are usually less expensive than PPOs. Remember that all managed care plans are designed to control costs of care and expenditures by the insurance company. Some plans contract with providers at reduced fees for all services. In other plans enrollees may choose a primary care physician from the list of participating physicians. This doctor, known as the gatekeeper, will authorize diagnostic tests, treatments, hospitalizations, and referral to specialists. Additionally, a plan administrator must approve many services, including hospitalization and length of stay in the hospital. These processes may result in greater savings than a traditional indemnity insurance program. These savings may be passed on to enrollees in the form of lower premiums and out-of-pocket expenses.

Since managed care plans save money by aggressively controlling how, where, when and how much health care service an enrollee receives, it is critical that adequate factual information be obtained before making a decision about what plan to purchase. Services needed and wanted by you and your family should be compared to what the plan makes available. Ultimately you may choose to pay more for the availability of benefits desired and needed in your particular health plan.