Hassle-Free Health Coverage: Choosing The Right Plan Introduction

Choosing a health plan is not the easiest task in the world. Or the most enjoyable. But going without health coverage is a bigger risk than most people can afford. What if you get injured and require surgery? The cost of a hospital stay can be as much as $400 a day. What if you or your significant other becomes pregnant? Even through a clinic, the price of prenatal care and delivery can exceed $5,000.

Health coverage is designed to help you in these situations -- to assume the risk of paying your medical bills. A good plan provides you with necessary funds to cover hospital and physician expenses associated with a serious illness, thus preserving your savings and other assets. So, it's important that you put some time and effort into deciding which plan is best for you and your family.

Although there is no one "cream of the crop" plan, there are some plans that are better than others for your specific needs. Health plans tend to vary, both in cost and the ability to get the services you need.

Although no plan will pay for every health care cost that you may incur, some will cover more than others.

Health insurance plans are usually indemnity (fee-for-service) or managed care. But, as we've discussed earlier, there are other ways to obtain health insurance, including:

- workers' compensation benefits for occupational disabilities;

- Social Security disability benefits;

- Medicare, if you are eligible;

- work-related benefits through employer-sponsored plans; and

- health coverage under any statutory plans.

Any of these programs may offer you enough health coverage that you would not need to buy standard policies. However, that will usually not be the case.

When considering a health plan, you should try to figure out the total cost to you and your family, especially if someone in your family has a chronic or serious health condition.

Indemnity and managed care plans differ in their choice of providers, out-of-pocket costs for covered services, and how bills are paid. Indemnity offers you more choice of doctors (including specialists, such as cardiologists and surgeons), hospitals, and other healthcare providers than managed care. In addition, indemnity plans pay their share of the cost only after they have received a bill.

Managed care plans usually have agreements with certain doctors and hospitals to provide services at reduced costs. With this type of plan, you will have less paperwork and lower out-of-pocket costs.

Over the past decade, the distinctions between indemnity and managed care have blurred. Indemnity plans offer managed care-type cost controls, and managed care plans allow their members to use providers that are not within the plan's network.