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Assess Your Health Insurance Needs
When making a major purchase, such as buying a new car, you assess your needs. Do you need transportation primarily for yourself or will you be carting around school-age children and their friends? Do you live just down the street from your workplace or do you have a long commute? If you belong to the child-toting, long-haul group, then a two-seater sports car with a gas-guzzling engine just doesn’t make practical sense for you.
The same is true for purchasing health insurance. Even if you’re healthy, it would not be a wise financial decision to join a high-deductible catastrophic health plan with no maternity coverage if you plan on having a child within the next year.
While you may find that all the homework and preparation that goes into finding the right health care coverage is an unpleasant task, there is no way of getting around it if you don’t want to sabotage your financial goals. Think about it. The lowest premium doesn’t always signal the cheapest plan and even good coverage at a moderate price can have big loopholes.
What if you regularly take an expensive medication for high-blood pressure and one of the plans you are thinking of choosing doesn’t cover prescription drugs? Can you consistently afford to pay for this medication out-of-your-own pocket? You must assess your needs and use these results to compare your health plan options before you enroll. Otherwise, when you seek treatment, you may be in for a nasty surprise. (See Health Plan Comparison Worksheet.)
Step One: Which Plan Will Work Best For You?
Once you know the difference between various kinds of health plans (See Health Insurance Basics), you must decide which type of coverage best suits your needs. You can use the series of questions below to help you determine whether a strictly managed HMO-based plan or an open access PPO-based plan will make the most sense for your personal situation.
Directions: Answer the following questions and record your answers. If a question is not applicable to your situation, skip it.
1. Do you prefer to have a primary care physician (PCP) to coordinate all aspects of your health care?
Yes □ (0) No □ (1)
2. Do you mind asking a PCP for a referral in order to see a specialist?
Yes □ (1) No □ (0)
3. Are lower out-of-pocket expenses more important to you than the freedom to see any doctor you choose?
Yes □ (0) No □ (1)
4. Are you currently being treated by a number of specialists?
Yes □ (1) No □ (0)
5. Do you plan on having a baby in the next year?
Yes □ (0) No □ (1)
6. Are you willing to pay for office visits as a trade-off for using any provider you choose?
Yes □ (1) No □ (0)
7. Do you have chronic conditions that require specialty care?
Yes □ (1) No □ (0)
8. Do you need coverage for preventive care such as Pap tests, mammograms, blood pressure screenings, etc.?
Yes □ (0) No □ (1)
9. Do you mind doing some homework and perhaps filing your own claim forms to save money on your out-of-pocket health care expenses?
Yes □ (0) No □ (1)
10. Would you rather pay one copay for an office visit and let your PCP’s office staff handle the claim forms ─ even if it means paying a higher monthly health insurance premium?
Yes □ (0) No □ (1)
Add up all your points. The lower your score, the more an HMO-based plan is best-suited to meet your health care needs. The higher your score, the more satisfied you will be the flexibility of a PPO-based plan. A score in the middle indicates you could benefit from aspects of either plan or perhaps a hybrid that combines features of both.
Step Two: A Few More Questions
Now that you have an idea which type of plan will work best for you, don’t make your final selection just yet. Please consider the six critical health care questions featured below. The answers to these questions will help you choose wisely and shape your overall satisfaction with your coverage.
If you have a favorite doctor (nurse practitioner, therapist, or some other health care provider), is she or he a participating provider in the plan you’re considering? Call your provider or the plan’s member services number to inquire. This information may also be located on their Web sites.
If you prefer to seek treatment at a particular hospital, does that facility participate in the plan you’re evaluating? Call your provider, the plan, or check any affiliated Web sites.
Are the benefits you most need covered by the plan? Use the Health Plan Comparison Worksheet. Make sure you read all plan documents and brochures.
How much will your premiums cost you over the next year? Read all plan documentation. Ask the health insurance provider.
What out-of-pocket expenses can you reasonably expect over the next year? Add up everything, including possible inpatient and outpatient hospital visits, doctor visits, and prescription drugs. Don’t forget vision and dental care if the plan you’re evaluating covers these. Figure in your deductible, any coinsurance, and copays.
What is the maximum amount you will have to pay out in the event of a catastrophic accident, illness, or injury? No one wants to dwell on worst-case scenarios, but a serious illness or injury can strike you or a loved one without warning. Again, make sure you figure your deductible, insurance, and copays into the equation.
Step Three: Is Your Health Plan Accredited?
When you’re assessing your health insurance needs, don’t forget to factor in the plan’s accreditation status. For HMO or PPO plans, a stamp of approval from the leading accrediting bodies (NCQA, URAC, or JCAHO) means the plan (or hospital) has made a commitment to consumer accountability and national health care quality standards. For insurance companies, independent outside rating agencies such as A.M. Best, assigns a rating. Look for a rating of excellent or better.
NCQA
The National Committee for Quality Assurance (NCQA) is the leading accrediting body for HMO-based plans and is used by most of the nation's Fortune 500 employers, federal and state governments, and consumers to help select among competing health plans. NCQA compiles an annual report card that evaluates plans on clinical quality and member satisfaction. These report cards can often be found on your state’s Department of Insurance Web site. You can also search report cards at the NCQA Web site, located at http://www.ncqa.org/
URAC
The Utilization Review Accreditation Commission (URAC) is nationally recognized as the leading accrediting body for PPO-based plans. It audits a broad array of health care services and systems. URAC’s quality benchmarking activities cover health plans, preferred provider organizations, medical management systems, health call centers, specialty care, and Web sites that feature health content. You can find out more about the accreditation status of the plan you’re evaluating by visiting http://www.urac.org/
A.M. Best
Named after its founder Alfred M. Best, A.M. Best was founded in 1899 as a worldwide insurance-rating and information agency. It is the largest and longest-established company devoted to issuing in-depth reports about insurance organizations. A.M. Best has offices in the United States, United Kingdom, and Hong Kong. Find them online at http://www.ambest.com/