Introduction
Health insurance is a complex marketplace. It is not always easy for a common man to understand all the clauses of a typical health insurance plan. That is why often people are either not covered fully or end up paying a very high premium for the basic coverage. This essay will explore various health plans available in the market and then recommend health plan options to a family of four. This essay will then further inspect the expected changes due to the implementation of Affordable Care Act in 2014.
Research of Various Insurance Offerings
There are many types of insurance plans available in the market. The Preferred Provider Organization (PPO) is the most popular plan among individuals and family looking for a balance between coverage and monthly premium. As the name suggests, choosing a PPO will give access to all the doctors and hospitals that fall within the network for that plan (eHIS, 2014). For example, if someone buys a PPO plan from the Blue Cross, then all the hospitals and doctors accepting the Blue Cross PPO plan will be accessible to the buyer of the insurance. However, out of network providers may not be fully covered in a PPO plan. This plan works best for families that want to stick to the healthcare providers, already in the network, for treatment. PPO is offered by most of the private as well as public players. Medicare offers the most cost effective PPO plan with large network coverage. Private players like AETNA, United HealthCare, Blue Cross-Blue Shield, Health America One and Medical Mutual are some of the excellent providers of PPO plan.
Health Maintenance Organization (HMO) is another type of insurance plan available in the market. In the case of an HMO, the buyer of the insurance needs to identify a primary care physician who would provide the basic healthcare needs (eHIS, 2014). The primary care physician also has the responsibility of referring specialists, when needed. HMO covers a person only within the HMO network of healthcare service providers. HMO plan is great for those, willing to pay a little less monthly premium, but would like to enjoy almost the same benefits as PPO plan. Furthermore, preventive care services like immunization, regular checkups are very well-covered under HMOs. HMO is also provided by almost all the insurance companies that provide PPO insurance plans.
Health Savings Accounts (HSA) are generally associated with PPO plans. HSA is a special bank account where every year the buyer of the insurance needs to park some money. The money is deducted on pre-tax basis (eHIS, 2014). If the buyer wants to use some amount of the parked money in a year then he can use that, but if the money remains unused then it gets carried forward to the next year. In fact, the money in HSA also collects interest. This is a great option to add if the buyer is young and healthy. This ensures that the buyer goes on accumulating good sum of money in his HSA account, which he can use later in his life, when most required. Adding an HSA to a PPO brings down the monthly premium significantly.
Indemnity plans are not very popular. Indemnity plans provide full freedom to the buyer, but they are very costly as well. If a person is not bothered about the monthly premium but wants to have flexibility, then this plan is a great option.
Recommendation
For a family, which has an income equal to the median income of the country, there are several providers providing great plans in HMO, PPO and HSA. However, there are few things to be taken into consideration. If all the doctors, visited by the family, hail from the same network and accept all the large insurance service providers, then it becomes easy to get a good deal. If not, then the family should try to find some good doctors, catering to all the needs, within the network (WSJ, 2013). Once that is done, the family should collect information about the quality of the network service provider in all the regions they visit. For example, the Blue Cross has excellent in-network coverage in Ohio but they don’t have coverage of the same quality in Utah. United Health Care, on the other hand, has a great coverage in Texas and Nevada, but has an average network in Ohio. Once the due information is collected, the family should decide whether to go for PPO or HMO health plan. If the premium is a big concern, then it is better to opt for an HMO and stick to the HMO network service providers only (WSJ, 2013). However, if the HMO network is not comprehensive and the family needs a little bit flexibility, then the family can buy a PPO for a higher monthly premium. Co-payment and Co-insurance should also be considered during the purchase of a health plan. If the number of doctors visited by the family per year is very less, then it is better to keep the copayment and deductible high. This will help reduce the monthly premium. The pre-existing condition of the boy with asthma may not be covered with most of the PPO and HMO plans (Bihari, 2010). This is advisable to add a supplement plan for preexisting conditions to the main plan, while buying health insurance, to cover the asthma related medical expenditures.
Affordable Care Act and Its Impact
Affordable Care Act will significantly impact the current health insurance market. It will bring in positive effects for the buyers. One of the major benefits, the family can have, is the inclusion of pre-existing condition for children. Even if a child, below the age of 18 years, has a pre-existing condition, the insurer cannot deny payment for that (Bihari, 2010). Furthermore, instead of buying private insurance, the family can buy the plans offered by Affordable Care Act which covers all the basic diseases at fewer premiums than any other PPO or HMO offered by private healthcare insurance providers (OCF).
Conclusion
It is important to understand the insurance market before buying a plan. PPO probably is the best option for a family with less means. It provides flexibility at a premium not exorbitantly high. A high deductible plan seems to be a good option for the family as most of the family members are healthy and they may not require serious medical help in the foreseeable future.
References
Medicare.gov. Health Maintenance Organization (HMO) Plan. Retrieved on 26th January 2014 from <http://www.medicare.gov/sign-up-change-plans/medicare-health-plans/medicare-advantage-plans/hmo-plans.html>
Bihari, M. (2010) #1. HMOs vs. PPOs – What Are the Differences Between HMOs and PPOs?. About.com. Retrieved on 26th January 2014 from <http://healthinsurance.about.com/od/understandingmanagedcare/a/HMOs_vs_PPOs.htm>
Bihari, M. (2010) #2. Pre Existing Conditions - Understanding Exclusions and Creditable Coverage. About.com. <http://healthinsurance.about.com/od/healthinsurancebasics/a/preexisting_conditions_overview.htm>
eHealth Insurance Services Inc. (eHIS). (2014). Health Insurance Buyer's Guide. Retrieved on 26th January 2014 from <https://www.ehealthinsurance.com/ehi/resources/buyers-guide?displayPage=/page2/&redirectFormHTTP>
U.S. News. (2014). Ohio Health Insurance. Retrieved on 26th January 2014 from <http://health.usnews.com/health-insurance/ohio>
The Wall Street Journal. (WSJ). (2014). How to Buy an Individual Health Insurance Plan. Dow Jones & Company. Retrieved on 26th January 2014 from <http://guides.wsj.com/health/health-costs/how-to-buy-an-individual-health-insurance-plan/>
Obama Care Facts (OCF). How to Buy Health Insurance. Retrieved on 26th January 2014 from <http://obamacarefacts.com/insurance-exchange/how-to-buy-health-insurance.php>
Minnesota Department of Health (MDH). (2013). Guide to Purchasing Health Insurance. Retrieved on 26th January 2014 from <http://www.health.state.mn.us/clearinghouse/purchase.htm>
