The Insurance Buying Guide: Pick Your Plan

When it comes to health insurance these days, you have a choice: Do you want to join a health maintenance organization (HMO), a preferred provider organization (PPO)? Or do you want to pay more and get a reimbursement-style policy (Medical Expense plan) so that the insurance pays you back for a percentage of your costs, after you meet the deductible?

An HMO is a form of managed care and consists of a network of doctors and hospitals that provide comprehensive health care services to their members for a fixed periodic payment, usually monthly. As a result, the HMO is both the insurance company and the health care provider. Because price is an important factor, about one in three Americans are enrolled in an HMO today, with 15 million enrollees in California alone.

The other Americans are covered by a more traditional reimbursement plan, Medicare, or they have no health insurance at all.

If you're searching for your own coverage, there is a tremendous variety of policies available in today's health insurance market. Some contain a single coverage (for example, hospitalization coverage only) or a combination of the major types of health insurance. Even if you're just choosing among the two or three plans offered by your insurance company or your employer, this chapter will cover what you need to know to choose the plan that's right for you -- and your family.