The Kaiser Family Foundation reports, “Medical bills forced 27 percent of uninsured adults to use up all or most of their savings in 2009.”
Some people have the savings or cash flow necessary to pay for a major medical problem. But if you don’t have $20,000 lying around to pay for an emergency bypass surgery, for example, you need insurance.
We can help most people find a medical insurance plan that fits their budget, from a plan that offers generous coverage to a high-deductible plan designed to protect your family from a catastrophic illness. Healthier people have more options, but if your health is poor, you can still buy hospitalization or critical illness insurance that will pay benefits if you are hospitalized or suffer a critical illness.
You can read more here about the different medical insurance plan types: PPOs, HMOs and POS as well as high-deductible plans.
Medical insurance plans with full coverage fall into three major categories:
Preferred provider organization (PPO) plans:
PPOs are the most common type of health plan today. A PPO contracts with a network of doctors; plans typically reimburse a higher percentage of fees for in-network doctors. Members can use non-network providers but will have higher copayments. Plans usually include features to avoid unnecessary health expenditures, such as requiring pre-authorization for elective procedures or a primary care physician’s referral for visits to specialists. Most plans also include wellness or disease management benefits designed to keep your employees healthy and control your claim costs.
Health maintenance organization (HMO) plans:
An HMO requires members to use physicians within the HMO’s network; HMOs typically do not pay anything for out-of-network treatment, except in case of emergency. HMOs give your employees less flexibility in provider choice, but often cost less and involve lower out-of-pocket payments than other plans.
Point-of-service (POS) plans:
POS plans combine features of HMOs and PPOs. Most POS plans require members to choose a primary care physician from within the POS network, but allow them to use out-of-network specialists with a referral from a primary care physician. Co-payments will be higher for out-of-network services.
Health Savings Accounts (HSAs)
If you want protection from catastrophic illness but you want to pay less in premiums you can take advantage of a high-deductible health plan linked to a health savings account. These plans offer lower premiums than a plan with full coverage. You can use the savings to build funds in a health savings account, which you can use for any tax-qualified healthcare expense.
Only individuals with an eligible high-deductible health plans and no other health insurance can have an HSA. You use account balances to pay for qualified health expenses; funds can accumulate from year to year.
Some employers fund their employees’ HSAs; employer contributions to an HSA are not considered taxable income. Contributions you make, up to the annual maximum, are tax deductible. Withdrawals used for eligible medical expenses are not taxable, and interest on your funds is also not taxable.