Q: If I am healthy, do I really need health insurance?
A: It is a common misnomer that healthy people do not need health insurance. The idea that health insurance is needed for those not of a healthy disposition is erroneous. Every person should have health insurance as an “insurance” policy for the rising health care costs. Without trying to sound too much like doomsday is approaching, strange accidents or health problems occur even among the healthiest of people. In reference to health care, people should hope for the best and plan for the worst.
Q: What is the difference between a group and an individual policy?
A: A group policy is a company-purchased or employer-purchased policy. It is a common practice for companies to offer insurance to their employees. These companies pay a certain percentage of the premium, and the employee pays the remaining percentage. A group policy is generally less expensive because risk is spread over a larger group of people. The employer could use either an HMO or a PPO. An individual policy can be purchased for individuals that are single, married, or in a family. An individual policy is available for those not covered by their employer. Generally individual policies are more expensive than group plans, and fewer services are offered under the individual policy.
Q: What is a fee-for-service insurance plan?
A: A fee-for-service plan is the most common type of insurance plan. It allows a person to use any doctor from any hospital and switch if needed or wanted. It requires a monthly payment called a premium and has deductible, a dollar amount that is paid before any obligation to the insurance company takes effect. After the deductible is paid, the insurance company then assumes responsibility of a percentage of the remaining bills for that calendar year. The percentage and deductible amount vary depending on the plan, the coverage, and the premium.
Q: What is an HMO?
A: HMO stands for health maintenance organization. An HMO is a prepaid health plan that generally covers comprehensive care for you and your family, including doctors’ visits, hospital stays, emergency care, surgery, lab tests, X-rays, and various types of therapy. HMO plans require a monthly premium and a standard co-payment (generally around $20 for a normal office visit). The premiums and deductibles of an HMO plan are generally less expensive than the premium and deductible of the fee-for-service plans. However, HMOs only cover care provided by certain doctors and hospitals whereas fee-for-service plans generally allow you to choose your doctors and hospitals.
Q: What is a PPO?
A: A PPO is a preferred provider organization, which is a combination of a fee-for-service plan and an HMO plan. Similar to the HMO, there are limited doctors and hospitals that are available to choose from. By attending the doctors or hospitals provided in the plan, most medical bills will be covered after a small co-payment. Most PPOs cover preventive care that includes physicals, baby exams, and mammograms. Unlike an HMO, a PPO allows you to use any doctor or hospital. Even if a doctor or a hospital is not a part of your plan, the insurance company will still pay a percentage of the health care costs; it will simply be a lower percentage for the visit or the procedure.