Merritt Personal Lines Manual: Comparing Plans

Most people tend to choose between a traditional indemnity plan and a managed care plan. As with any plan, whether you end up choosing a fee-for-service plan or a form of managed care, you must examine a benefits summary or an outline of coverage. The benefits summary gives you a description of policy benefits, exclusions and provisions which makes it easier to compare policies.

Read the summaries carefully. Think about you and your family's specific health care needs. You may not want coverage for pregnancy; but you may want coverage for chiropractic services.

Here's a list of important questions to get you started:

• What exactly does the plan cover? Some services such as mental health, drug rehabilitation or dental care, may not be included at all. While you can't possibly predict all of your health care needs, find out if the treatments that you need are covered. Also, find out if treatments that are considered experimental or non-traditional are permissible and, if you're interested, if alternative or holistic treatments are covered.
• What will it really cost? Don't just look at the monthly premiums. Consider the overall costs, including co-payments and deductibles. Some plans offer a reasonable limit on the total you will pay each year. Others place a lifetime limit on what the company will pay, which you can reach if you have one major health problem.
• Do you have a choice of doctors? Be sure to have some flexibility. Also be sure at least a few local hospitals and pharmacies are covered under the plan.
• Is there a utilization review? In some plans, you cannot switch doctors or see a specialist without authorization. What happens if you don't like the doctor you choose?
• Who decides what is considered medically necessary? Is it the insurance company or the doctor that decides?
• What about pre-existing conditions? If you have a pre-existing condition, such as high blood pressure, you may be liable for all costs relating to the illness. Know when and if your insurance pays for any illnesses you may have.
• What is the relationship between your doctor and your health insurance company? If your doctor receives a set fee per patient (capitation) or receives a bonus for minimizing costs (incentives), your healthcare could get shortchanged. A doctor may be reluctant to order tests or referrals under these situations. Gag clauses can prevent doctors from revealing their compensation or discussing treatment options not covered by the plan.
• Does the plan you're considering have a grievance procedure? What if something goes wrong? Can you appeal? Be sure to talk with someone who is authorized to answer your questions, like the plan administrator -- and keep good records. Who regulates HMOs in your state and what's the procedure to lodge a complaint if you think you're being treated unfairly?

When comparing coverage, it is critical to look into a plan's limitations and exclusions to determine which expenses are not covered and which are restricted. For instance, many policies will pay only for treatment that is deemed "medically necessary" to restore you to good health. These policies often will not cover routine physical examinations, cosmetic procedures or even the costs of eyeglasses or hearing aids.

The following is a list of services you might want to ask about when looking into a plan:

• covered medical services,
• inpatient hospital services,
• outpatient surgery,
• physician visits (in the hospital),
• office visits,
• skilled nursing care,
• medical tests and x-rays,
• prescription drugs,
• mental health care,
• drug and alcohol abuse treatment,
• home health care visits,
• rehabilitation facility care,
• physical therapy,
• speech therapy,
• hospice care,
• maternity care,
• chiropractic care,
• preventive care and checkups,
• well-baby care,
• dental care and
• other covered services.

It's worth looking into how much the service fee is for monthly payments -- and inquiring about a discount for prepayment.

Even if you already have health insurance, you'll want to review your policy once a year to be sure it still matches your needs.

As the health care system continues to change, your health insurance should change with it.

insurance companies, etc.

Most life and health insurance companies market both group and individual hospitalization coverage.

There are also service organizations, such as Blue Cross/Blue Shield, that provide prepaid medical and health benefits in accordance with state laws that recognize them as not-for-profit organizations and exempt from state premium taxation.

The only difference between the two is that commercial insurers have a contractual relationship with you and service organizations have a contractual relationship with providers. With a service organization, you use the services of the contracted doctors or hospitals -- participating providers -- and claims are settled directly with the providers.