Family Health plans & their importance

A family health plan is insurance coverage which helps to pay your family’s health expenses. Many people obtain their family health plan through their employers, but some purchase private policies if circumstances require it.

1. Types:
There are many types of family health plans available. Most commonly, people are given the choice between an HMO (Health Maintenance Organization) and a PPO (Preferred Provider Organization). Each of these types of family health plans typically covers doctor’s visits, diagnostic testing, hospital stays and various other types of medical services. Each type of plan has very specific payment and provider rules, and each program is considered a managed health care plan. Understanding the difference between the two is important when choosing your coverage.

2. Features:
An HMO plan is a prepaid health insurance plan. Most HMO plans don’t have large deductibles or out of pocket expenses, with the exception of standard co-pays for each service. Many HMO plans require that a patient choose a primary care physician (PCP) and may even assign one. In either case, so long as the insured remains within the company’s provider network, he may choose to change PCPs. Most HMOs do not offer coverage outside of their provider network, with the exception of emergencies. Some allow for out of network coverage, but one can expect to pay deductibles and higher co-payments. In most cases, PCP representatives are responsible for referring outside specialists or other health care providers.

3. Function:
A PPO is a family health care plan which also has a specified provider network, but PPO members aren’t required to stay within the network. However, be aware that in most cases, out of network benefits are not equal to in network benefits. That is, while a PPO plan may have a “no deductible” policy for in network provides, it may require you to pay one for out of network providers. That means that in addition to the higher co-payment you’re likely to incur at an out of provider’s office, you can expect a bill for the amount of the deductible as well. So, for example, if you have a $200 out of network deductible, you will be required to pay that much, plus your co-pay, before the insurance company will consider paying any claims. Also, while a physician can recommend a specialist, patients are not obligated to use any particular one, nor do they even need to obtain a physician’s referral in order to see a specialist.

4. Considerations:
When choosing your health care plan, choose carefully. First, check to make sure that your preferred providers are in your new insurance company’s network. If not, ask the provider to join. Most will, but if this isn’t an option, decide how important it is to keep your doctor. Some patients choose to pay higher insurance premiums in order to keep their existing doctor. Next, consider any prescriptions or durable medical equipment you use. For prescriptions, check to see that yours is on the insurance company’s drug formulary plan. If not, take note of the availability for coverage of “non-preferred” drugs. If available, be sure the higher co-payment is one you can afford. Regarding durable medical equipment, check to see that the equipment is covered (even if you already own it—it may need repair, replacement or parts) and that your provider is in network. Again, most will at least attempt to join a network if the insurance company allows.

5. Effects:
If you have children, be sure that necessary services are covered for them as well, and ideally that there is no cap on coverage. For example, an insurance program which caps doctor’s visits at $200 per year is not a good choice for small children who may need several well or sick visits per year. Be certain to check coverage for the kids’ pediatrician and any prescriptions or medical equipment as well. And, if you’re pregnant or may become pregnant, take a hard look at the maternity coverage—even if you don’t expect to need it. Remember that the cheapest plan is not always the most effective plan, and since most employers take the payment out of your paycheck pre-tax, you probably won’t even miss the extra premium. Get the best coverage you can afford.