Health insurance is a necessity in our daily lives – it insures you from unforeseen medical implications, preventing your finances from spiraling into a financial meltdown. It is important to choose the health insurance policy that best fit your needs, and the vast variety of health insurance plans helps you in this aspect; as an employer, there are different types of group health insurance, namely Health Maintenance Organizations (HMO), Preferred Provider Organizations (PPO) and Point-of-Service (POS). There are even more state-run policies that protect the needs of the people, such as the Combined Omnibus Budget Reconciliation Act (COBRA) and Medicare. However, how to do you know what to look out for when comparing health insurance and which one to eventually single out as the health insurance policy of choice?
1. HMO, PPO and POS – For Employers
If you are an employer comparing health insurance plans to use for your enterprise, you would have come across these 3 terms. So, what are they, and which one should you choose?
HMO – HMO health insurance schemes require you to pick a specific physician to be your company’s primary healthcare provider. This physician will be your employee’s first point of contact for any healthcare matters. If there is a need to be referred to a specialist, your physician will refer your employees to them. However, the coverage will only be extended to specialists and doctors who are within the HMO network; the coverage does not extend to non-HMOs and in these cases, your employees will have to pay the medical bills themselves. As such, it is important to study the list of affiliations of the chosen physician, and make sure the network is extensive enough before you choose him or her as your business’ primary healthcare provider.
PPO – PPO operates in the same manner as HMO, but offers more flexibility – this coverage allows beneficiaries to visit physicians outside the PPO network, and still claim a portion of the medical costs incurred. However, the insured will usually be required to pay the difference between the PPO network pricing, and the pricing of physicians that are out of the network.
POS – You will choose a physician that is within the POS network, and this physician will be your enterprise’s primary healthcare provider. Your employees will enjoy discounted rates as per the health insurance plan when they visit this physician. However, they will be required to pay medical expenses themselves if they visit another out-of-network physician unless the primary healthcare provider has referred them to the particular doctor.
When comparing these 3, it is noteworthy that POS has the highest premiums, followed by PPO and finally HMO. PPO will offer your employees the highest flexibility, but it may be hard to estimate their out-of-pocket medical expenses. If you have a large business, it might be better to go with a structured plan such as HMO, while small-business owners may want to go with POS or PPO for its increased flexibility
2. Drug Prescription Coverage
Some health insurance plans offer drug prescription coverage – when comparing health insurance policies, if you are under medication for prolonged periods of time, this coverage is important. Each health insurance policy may offer different ranges of drug prescription coverage: they may partially cover a certain type of medication, and neglect to subsidize some medications altogether. It is vital for you to think through the probable alternative drugs that your doctor might issue you as your case progresses, and look out for this coverage when comparing health insurance. You should consult your doctor about this issue so that you will have a better picture of the medication you will be taking, and subsequently plan for your health insurance package.
It is a fact – as you age, you will be more prone to medical conditions. As such, your premiums will definitely increase as you age to account for the higher probability of payouts by your insurer. It is recommended that you buy and stick with a health insurance plan when you’re still young. However, if you’re looking for a health insurance package in your sunset years, you might want to consider comparing health insurances that offer long-term healthcare coverage. As you age, you never know when you might be hospitalized for prolonged periods of time. With the long-term healthcare coverage, the medical costs incurred from your stay in the hospital will be covered by your insurer.
Of course, there are many other factors that you will have to look out for when comparing health insurances. However, these 3 factors are important in your decision-making process. Take your time, and choose wisely – health insurances are usually for life.