Over the past several years, it seems as though everything has increased in cost and this includes healthcare. Companies are no longer able to bear the rising costs of the health insurance policies and as a result are making their employees – that would be you – pick up the slack for the rest of the bill.
With the costs increasing annually, when open enrollment rolls around, it is a good idea to re-evaluate your health care plan to make sure that it is appropriate for your needs. In order to do so, you have to fully understand what you are looking at when you review your enrollment forms. Here are a few tips to help you on your way.
HMO vs PPO vs POS – What’s the Difference?
Many people are not clear as to the difference between an HMO (Health Maintenance Organization) and a PPO (Preferred Provider Organization) which
can lead to confusion when it comes time to pick a medical plan. Add to the variety of options – POS (Point-Of-Service) which gives you another choice but confusing as to how they all compare to each other.
HMOs are usually cheaper, but have more restrictions than a PPO. With a PPO, you pay more in annual premiums, but you also have the flexibility to choose which doctor you want to use and when.
Choosing an HMO is great for those who are okay with being limited in choice of doctors. If your doctor is not in your network and you refuse to change, you would want to stick with your PPO medical plan.
POS plans are hybrid of the two – HMO and PPO. You still have to choose a primary care physician and you may go out of network but you must know that you may have to bear the cost of doing so yourself. That is. unless your PCP makes the referral to that doctor.
Which Plan Is Right For Me?
This depends on how often you see the doctor. In my case, I don’t see my PCP outside of annual physicals and the once a year visit to a specialist depending on what’s going on. I am generally in the urgent care center more often than I tend to see a PCP or specialist. So in my situation, I am choosing to go with the POS plan because I do have more flexibility and may be able to work with the PCP to get a referral to see the doctor I want rather than being stuck in a HMO. So because I don’t see the doctor often at all, the POS works because the cost is in between the HMO (lowest) and the PPO (most expensive). I am also considering comparing the benefits of being in a group POS plan with an Individual PPO plan from EHealthInsurance.
Run the numbers in your own situation and decide which plan is right for you. PPOs are most expensive and financially worth it if you see the doctor or other specialists often. HMOs are pretty basic if you don’t see the doctor at all and prefer or need a lower premium.
Everybody has options when it comes to healthcare, even if your employer only offers one plan, you can choose to decline the insurance altogether. This may be
handy for college students who are covered on their parents’ insurance and cannot afford to lose the premium each pay period. It is also an option for seniors who are covered under other health insurance policies such as Medicare.
If your employer offers more than one type of insurance, you will know when they hand out the forms for open enrollment. In addition, most – if not all – employers offer a meeting that describes each plan in detail and whether there have been any changes in the plan since the last open enrollment period.
If you are not clear on which plan is better for you, ask your employer questions. You do not have to reveal too much of your personal life details, but you can answer questions that are applicable to your personal health care needs. If your employer is unable to help, you can call the individual insurance companies as well or have a friend or family member help you.
Another problem that people encounter is not being able to understand the lingo that is often included in insurance literature. If you are unclear as to what the lingo means, do not sign up for it until you do understand. Not everyone will buy into a HSA (health savings account) or an FSA (flexible spending account) for example.
As with anything, the more educated you are, the better decisions you are capable of making. Because open enrollment only comes around once a year, it is best to be fully advised before you make a decision that you will be stuck with.