Health Insurance Decisions

When you take out your health insurance policy, there are many different things you must consider. What might immediately spring to mind is the premium of the policy, but there are other concerns that you should think about before paying that first premium.

HMO vs. PPO: An HMO policy is pretty restrictive about the doctors that you can see on the plan. You may only visit those doctors who are in-network if you want to pay a pre-negotiated rate or have insurance help you out at all. A PPO policy offers you a bit more flexibility in that you can visit doctors outside the network and still get some financial recompense from the insurer. If all your favorite doctors work within an HMO network, this could work out great for you. But if you have established relationships with doctors outside the network, then a PPO could be a better choice.

Deductible and Out of Pocket Maximum: Your premiums aren't the only monies you will need to spend each month when you have health insurance. If you have an HMO you may need to spend money on copayments. If you have a PPO, then you might have both deductibles and out of pocket maximums - both of which will determine what you are financially liable for each year in addition to premiums. In fact, your insurance benefits won't even kick in until you've spent your deductible. Deductibles and out of pocket maximums can be small or large amounts and they can present an impressive financial burden if an accident or medical need arises and you are not ready for it.

Limits: Every insurance policy has a lifetime limit. That means there is a maximum dollar amount that your insurer will pay out on your behalf over the course of your lifetime. Often these limits are in the millions, which sounds like a lot, but if you have or develop a chronic illness or injury that needs extended care, you may find yourself reaching the limit pretty quickly. A lower limit protects the insurance company's interests and will reduce your premium, but it also creates more potential liability and exposure for you.

Group or Individual Policy: Many of the above choices and decisions become moot when you are offered acceptance into a group policy, or do they? Group health insurance policies are great options for some individuals, especially those with pre-existing conditions who are often denied individual coverage because of their health history. But what about healthy individuals who are young and have almost no history of illness? For these individuals, the rates offered by group insurance policies may not be beneficial and the inflexible benefits might also be unsuitable for their lifestyle and risk. This is why it is best to compare rates on individual policies with various network structures, limits and deductibles, to the rates of a group policy. This ensures that you get the best deal for you and your health history instead of just taking what's available.

When looking at health insurance options always do your best to evaluate all the options and weigh them according to importance - don't just think about premiums.