Choosing the Right Health Insurance Policy

Choosing a health insurance policy sends some people into a panic. As any new employee knows, during the first week you are handed lots of paperwork, including your health insurance options. Do not be overwhelmed, as picking the right policy can be easier with a few simple steps.

The first important thing is to know is when you can apply. For a new employee, the employer will have a set number of days in which a new employee can enroll. Most work places set the time frame at 45 to 60 days. After that time, you will not be able to enroll until open enrollment the next year. Open enrollment is the time when existing employees can sign up for new policies or opt to keep their current policy. Also, anytime a life changing event takes place, an employee can change his health insurance policy. Life changing events include the birth of a child, adoption,marriage, or a spouse losing his health insurance coverage.

When choosing a health insurance policy, it is important to know that there are many varieties, but most fall into three basic categories. There are Health Maintenance Organizations or HMO's, Preferred Provider Networks, or PPO's, and Traditional insurance. Each plan works differently. An HMO provides a list of doctors who are contracted for that policy. An individual must choose a doctor from that list. Most HMO's require a referral before going to a specialist. A PPO usually provides 2 levels of benefits. The first is in network, or the list of PPO doctors that are contracted with the insurance. The second option is to go out of network to any doctor the patient desires. Coverage is better with an in network or contracted provider. The last option is a Traditional plan. A Traditional plan provides coverage with any doctor. Generally no referral is needed for a specialist. This plan is usually portable from state to state.

The benefits are different with each plan. An HMO usually has no deductibles to be met before coverage begins. The co pays are generally less expensive. Most HMO's do not have a yearly maximum on coverage or do they have a lifetime maximum benefit amount. The drawback is that the list of doctors may be limited. In addition, some procedures may not be covered. More expensive medications are sometimes also not covered. With a PPO, benefits are better with a contracted doctor and generally the benefits are similar to an HMO as long as the patient stays in network. Out of network benefits provide for any doctor. The catch is that benefits are better in network than out. PPO's generally have deductibles to be meet before coverage beings, whether using in network or out of network doctors, but the amounts would differ. All Traditional plans have deductibles, yearly and lifetime maximums. Policies differ, and some of these maximums are very large, providing for almost any medical emergency or condition. It is important to look at each policy offered to compare differences.

So which policy is best? If you want to spend as little out of pocket on medical care as you can, an HMO is best. The co pays are smaller and there are no deductibles to be met before coverage begins. If you prefer the flexibility of having in or out of network coverage, a PPO could be for you. This plan also works well if you travel as the out of network benefits can be used. If going to whichever doctor you desire is important, a Traditional Plan is for you. Some argue that the better doctors only take Traditional plans. Also,Traditional plans will cover almost any procedure and will cover in any state.

With the correct information, anyone can chose the right health insurance policy for their family. Before enrolling in any plan, compare all options and make an informed decision that is best for you and your family.

http://health.howstuffworks.com/medicine/healthcare/insurance/choose-insurance-plan.htm
http://www.cmanet.org/PUBLICDOC.cfm/57/5
http://www.ehrlichfirm.com/articles-briefs/hmo-faqs-compare.html