Choosing Health Insurance

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It’s that time of year. The time when you must select your health care plan for next year.

Being that the open enrollment period is upon us for employers it’s good to review the basics of what Health insurance coverages mean. With all the recent changes in Health Care you may be thinking what happens to your health insurance as you go to choose a plan for 2014.

Well… Not much, as the employee based plans won’t see much change. But maybe you are asking, what they heck do all the health coverages mean again, I don’t know which one to choose?

Know the basics

Deductible – The amount you pay the insurer to start insurance coverage for whatever you need. For example if you have a $200 deductible and need a $10,000 surgery of which your insurance will cover 80% of the cost, then you would have to pay your deductible before the insurance company started paying their 80%.

Coinsurance amount – is the amount the insurance company splits the cost with you, which is usually 80/20, meaning your insurance company will pay 80% of the cost while you cover the 20% after the deductible is paid.

Maximum Out of Pocket – The maximum you will pay for any procedures (surgeries, the like) after the deductible. In the previous example if your maximum OOP was $1,000, after you pay the $200 deductible you would be responsible to pay 20% (co-insurance amount) but would only pay up to your maximum Out of Pocket, which would be in this case $1,000.

Premium – Cost of coverage, either you pay, your employer pays or you share. This is usually a monthly cost.

Copay– The amount you pay when you visit a Doctor.

HMO – think of a gatekeeper. You must visit your primary doctor to have access to other specialist, through a primary doctor referral

PPO – Go direct to the Doctor, no gatekeeper.

Knowing these basics give you a better idea on which insurance to choose. A rule of thumb is that if you are young and healthy a high deductible is likely best being that you won’t have much need to see a Doctor as would a 60 year old. Keep in mind that if you do have a high deductible then you should have the cash in reserves, if you did have a health event, to pay for the high deductible cost.

One last thing to do is call your primary doctor before you switch coverages so that you know they will accept your new insurance. Don’t let health insurance and the new laws scare you, give us a call if you have questions.

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