Health Insurance: A Brief Overview

While many of us are fortunate enough to have a job that comes with benefits, including company-subsidized health insurance, there are many of us who work in non-traditional jobs, for small businesses, or who are self employed. For everyone, no matter the status of their employment, health insurance is a necessary expense.

There are many reasons to purchase health insurance: to off-set the cost of prescription pills, to pay for treatment for chronic conditions, such as asthma, to cover the cost of maternity and well-baby care, as well as the cost of childbirth itself, and to help guarantee access to medical care in emergent situations, but all health insurance is not equal.

Whether your insurance comes from your employer, or you are purchasing your own, you will most likely have to choose between an HMO – Health Maintenance Organization – or a PPO – Preferred Provider Organization. While there are similar features of each (discounted fees in-network, for example) there are also some major differences. Here’s a quick description of each:

HMOs
These are the most affordable health insurance plans available, but they’re also the least flexible, and are generally geared toward members of a large group. In fact a major objective of the HMO system is to reduce medical expenses for everyone by sharing the cost, and increasing preventive care.

Advantages of HMOs include:
• Customers get low co-payments and minimal paperwork, as well as access to preventive care programs.
• Customers pay only the co-payment for most routine visits to in-network doctors, including specialists.
• HMO health insurance typically includes routine doctor’s visits, outpatient services, medical care, emergency room visits, and short-term mental health care.

Disadvantages of HMOs include:
• Customers must choose a PCP, or primary care physician, who oversees their medical care.
• If you go to an out-of-network doctor, you are not covered.
• Your PCP must refer you to any specialists you need to see (though most HMOs now allow women direct access to ob/gyns).

PPOs
PPOs, also known as POS plans are similar to HMOs in that customers must still select a primary care physician, but they offer a bit more flexibility in that there is coverage for out-of-network doctors, it’s just not as much. In-network physician visits generally involve a low co-payment.

Advantages of PPOs include:
• A low co-payment for in-network doctors and specialists, as well as emergency care.
• The ability to visit out-of-network doctors
• Direct access to specialists
• Preventive services and well-being workshops (weight loss and quitting smoking, for example)

Disadvantages of PPOs include:
• Customers must still select a PCP
• Visiting an out-of-network doctor may entail extra paperwork, and instead of the doctor billing your insurance, you may have to pay upfront, and be reimbursed.

Whether you ultimately choose an HMO, PPO, or individual plan (in which you don’t have a primary care physician, and simply see doctors as-needed), one thing to remember is to remain insured, especially if you have ongoing medical issues. If you allow health insurance to lapse, you could end up with a chronic condition not being covered, or having to wait a year for coverage. As well, if you visit a private hospital without insurance, treatment may be withheld (county facilities generally cannot refuse).

Be sure that you address all concerns either with your insurance agent, or with your company’s benefits representative before committing to a plan, or severing your relationship with the insurance or the company itself, and remember, health insurance of any kind is still better than not having any.