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Health Insurance

Everyone needs health insurance, and the time to purchase it is before you suffer a serious injury, illness or get pregnant. Health insurance policies do not cover pre-existing conditions. A right to health insurance is not mandated by state or federal law, although many employers and organizations offer group health insurance as a way to attract and retain employees and members. Individual plans are available for those not covered by a group plan and federally sponsored plans help those eligible who cannot afford an individual plan.

There are a variety of types of health plans, offering a range of coverage and each with advantages and disadvantages. Health Maintenance Organizations (HMO), Point of Service plans (POS) and Preferred Provider Organizations (PPO) are managed care plans for cost-effective medical care for individuals and families. Fee-For-Service Plans (FFS) also known as Traditional Indemnity plans, are more flexible, but also more expensive.

HMOs are the cheapest, but also the least flexible. HMOs offer low co-payments (fees you pay when you visit a health practitioner), coverage for preventive health services and little paperwork. They usually cover basic health services such as: doctor visits, emergency room visits and outpatient services and short-term mental health treatments. You must choose a primary care physician (PCP), you are restricted to a network of health care providers and you need a referral from your PCP to see a specialist.

FFS plans offer more flexibility by letting you choose your own doctors and hospitals and allowing you to see a specialist without a referral, but they also have high deductibles (usually between $500 and $1500) and only pay 80% of the bill up to a scheduled amount. You may have to pay upfront and apply for reimbursement afterwards.

POS plans combine some of the features of HMOs and FFS plans. With a POS plan you must choose a primary care physician and you can see a network of health care providers for a small co-payment. You can see a doctor outside of the network, but you may only be reimbursed for a portion of the cost.

PPOs charge low co-payments if you stay within the network of health care providers and you can see a specialist without a referral if they are part of the network. If you see an out-of-network practitioner you may have to pay upfront and submit your paperwork for reimbursement. You may also have to pay a deductible and any difference in fees over the scheduled amount.

Individual health insurance is more expensive than group plans and needs to be underwritten (customized to your particular insurance risks).

Medicare, Medicaid and the State Children’s Health Insurance Plan (SCHIP) are federally sponsored health insurance programs to assist eligible individuals, families and those over 65 who are not covered by group plans and cannot afford individual plans.

When evaluating your options for health insurance, consider the type of coverage you want for yourself and your family, the amount of flexibility you desire in choice of health care providers and how large a co-payment, upfront fee or deductible you can handle.