Consumer Guide

How do you choose the right health insurance plan?

• First, make sure the quote you're getting is for coverage in your state.
• Next, be sure to consider special health needs you may have. (If you're getting insurance for family members or for employees, think of any special needs they may have as well.)
• Decide if seeing a doctor or specialist of your choice is a priority. (This will help you choose between an HMO or a PPO).
• Compare notes! Talk to friends or family members about their health care plans. Find out what's working for them.

• HMO - Health Maintenance Organization. HMOs are known for low co-payments. With an HMO you'll select a primary care doctor within the HMO's network of physicians. In order to see a specialist, you'll have to get a referral from your primary care doctor.
  
  
• PPO - Preferred Provider Organization. PPOs usually have somewhat higher co-payments than an HMO, but in an PPO you'll be able to see specialists without having to get a referral. If you choose a specialist who's inside your PPO's network of physicians, the insurance company will pay a higher percentage of the fee.
  
  
• Indemnity Plan (also known as Fee-for-Service) - Indemnity plans were the most common type of health insurance 30 years ago, and they're similar to the way auto insurance works: you pay a deductible and then your insurance company pays the majority of the bill. With the rising cost of healthcare, insurance companies have moved away from Indemnity Plans, which offer significant autonomy, to more managed plans, like HMOs.
  
  
• POS - Point-of-Service. You have two choices whenever you receive health care services in a POS plan - you can either use the plan like an HMO by seeing your primary care doctor, or you can use it like an Indemnity Plan by seeing doctors outside your network but paying a higher percentage of the bill.
  
  
• HSA - Health Savings Account. HSAs are pretax savings accounts that are intended for medical expenses. HSAs aren't really a type of health care plan, but they're a way to pay for the health care you receive under one of the above plans. HSAs are similar to retirement funds like IRAs in that they are tax-advantaged savings accounts. With an HSA, money is deposited before taxes are taken out, and the funds can be taken out tax-free when used for medical expenses. HSAs were part of President Bush's Consumer Driven Health Plans that were signed into law in 2003.