Health Insurance Choices

Traditional, HMOs and PPOs

When purchasing health insurance, your choices will typically fall into one of three categories:

• Traditional fee-for-service health insurance plans are usually the most expensive choice. But they offer you the most flexibility when choosing health care providers.

• Health maintenance organizations (HMOs) offer lower co-payments and cover the costs of more preventative care BUT your choice of health care providers is limited.

• Preferred provider organization (PPOs) offer lower co-payments like HMOs. Their advantage over HMOs is that they give you more flexibility when selecting a provider. A PPO gives you a list of providers you can choose from.

WARNING: If you go outside the HMO or PPO network of providers, you may have to pay a portion or all of the costs.

The National Committee for Quality Assurance (NCQA) evaluates and accredits HMOs. You can find out whether one is accredited in your state by calling 1-888-275-7585. You can also get this information as well as report cards on HMOs by visiting its website (www.ncqa.org). Medicare beneficiaries can compare HMO programs at www.medicare.gov and www.medicarenewswatch.com.

When choosing among different health care plans, you’ll need to read the fine print and ask lots of questions.

• Do I have the right to go to any doctor, hospital, clinic or pharmacy I choose?

• Are specialists such as eye doctors and dentists covered?

• Does the plan cover special conditions or treatments such as pregnancy, psychiatric care and physical therapy?

• Does the plan cover home care or nursing home care?

• Will the plan cover all medications my physician may prescribe?

• What are the deductibles? Are there any co-payments?

• What is the most I will have to pay out of my own pocket to cover expenses?

• Are there any limits on expenses covered in a year? In my lifetime?

• If there is a dispute about a bill or service, how is it handled? In some plans, you may be required to have a third-party decide how to settle the problem.

Long-Term Care Insurance

Medical advances have resulted in an increased need for nursing home care and assisted living. Most health insurance plans and Medicare severely limit or exclude long-term care. Here are some questions to ask when considering a separate long-term care insurance policy.

• What qualifies you for benefits? Some insurers say you must be unable to perform a specific number of the following activities of daily living: eating, walking, getting from bed to a chair, dressing, bathing, using a toilet and remaining continent.

• What type of care is covered? Does the policy cover nursing home care? What about coverage for assisted living facilities that provide less client care than a nursing home? If you want to stay in your home, will it pay for care provided by visiting nurses and therapists? What about help with food preparation and housecleaning?

• What will the benefit amount be? Most plans are written to provide a specific dollar benefit per day. The benefit for home care is usually about half the nursing-home benefit. But some policies pay the same for both forms of care. Other plans pay only for your actual expenses.

• What is the benefit period? It is possible to get a policy with lifetime benefits but this can be very expensive. Other options for coverage are from one to six years. The average nursing home stay is about two and one-half years.

• Is the benefit adjusted for inflation? If you buy a policy prior to age 60, you face the risk that a fixed daily benefit will not be enough by the time you need it.

• Is there a waiting period before benefits begin? A 20 to 100 day period is not unusual.