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Posts Tagged ‘Health Insurance’

The soaring cost of medical care and the resulting pressure on health insurance  premiums have become top-priority issues for employers, employees, the self employed, the federal government, and recipients of various government health insurance plans. The current health insurance system is not only costly but also extremely complex and constantly changing. Years ago, health insurance was relatively simple. You went to the doctor of your choice. He or she billed your insurance carrier directly, or you paid the bill and submitted it for reimbursement. If you worked for a large company, you paid no premiums, and your co-payments, if any, were minor.

Now, you have many more choices to make. Do you want the traditional fee-for-service indemnity plan? How about opting for the health maintenance organization (HMO) or preferred provider organization (PPO) alternative? Should you participate in a flexible spending account (FSA) plan? Today, you have a much bigger stake in these decisions, because you are often required to pay part of the health insurance premiums, and your deductibles and co-payments are far more costly than they used to be. On top of what is occurring between private employers and their workers, massive changes in health insurance coverage provided by the government promise to cost you even more money and angst.

Despite these complexities, it is crucial to understand your health insurance  options and maximize your benefits at the least possible cost. A good health insurance  plan can be the best employee benefit you receive because its coverage  would be extremely expensive to replicate on your own. For this reason, many  employees fear losing their job or are reluctant to switch companies if health  benefits at the new company are not equal. Adequate health insurance is critical  because you can easily be devastated financially if you or a family member needs  major surgery or long-term medical care.

The optimal traditional fee-for-service indemnity policy is divided into two plans. The basic plan reimburses you for doctors’ bills, drugs, outpatient surgical procedures, and other medical expenses up to a certain annual dollar limit. The second plan, called major medical, covers extended hospital visits and other major medical procedures. Both the basic and major medical plans, if offered by an employer, usually cover the employee, his or her spouse, and any children age 23 or younger if the children attend school. The basic plan, which may be offered directly by your employer or by an outside insurance company, usually applies deductibles of $100 to $1,000 or more before your bills are reimbursed. Some companies impose a fixed annual deductible of $100 or $200 for all employees; others tie the deductible to your salary level. After you pay the deductible out of your pocket, all further bills are usually reimbursed for 80 percent of your cost, up to a specified annual limit. Once you have spent more than that limit, you are reimbursed 100 percent.