Thursday, December 24, 2009

How to Choose the right Health Insurance Plan

Health insurance (HI) is big deal, so you should make sure you get the best one. Choosing the right HI plan can save you good money in the long run. The most vital thing is to figure out as much as you can about the insurance plan before and make sure the plan you choose fits your needs appropriately , or you may encounter unpleasant surprises later on.
HI Terms
When reviewing health plans always compare premiums. When you review health plans you should compare some basic items like
The monthly premium: the monthly charge for HI
Annual deductible: how much you have to pay before the insurance company starts to pay
Co-pay and co-insurance amounts: It is the portion you have to pay to your doctor for health care services. Co-insurance is the portion you have to pay after your deductible is met. This is usually a 80/20 percentage.
ER and hospital charges: this is defined as inpatient and outpatient co-pays.
Prescription Drug coverage: this states how much you pay for generic, mid tier and brand name drugs.
When considering premiums and deductible, remember to take into account how much the plan will cost for the entire year.
We will consider 3 different kinds of people, and determine what kind of health plan they should choose.
Type 1
Type 1 patient rarely gets sick, rarely sees a doctor. He should choose a plan that has the lowest monthly premium, even if the deductible is higher, his chances of having to use his deductible are less.
Type 2
Type 2 patient occasionally gets sick, has one or two prescription drugs she has to take on a regular basis. She should choose a plan with a mid-range premium and deductible, depending on how much she wants to pay.
Type 3
Type 3 patient has a chronic illness (diabetes, high blood pressure, hypertension) and has numerous prescription drugs she has to take on a daily basis. She should pick a plan that has a lower deductible, and a low deductible for prescription drug coverage. Picking the lowest deductible possible means she will have to pay for less out of pocket.
Before picking any health insurance plan, check to make sure they cover outpatient procedures, and if so, at what percentage. In conclusion, find out as much as you can about the various coverage plans from your human resources department so you can make an wise decision you can live with.

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