The continuing escalation in health care costs
makes a well-designed health insurance program essential to
your financial security. With semiprivate room rates averaging
over $500 per day, a "few days" in the hospital could
equal thousands of dollars in expenses.
When reviewing your health insurance coverage,
consider the following:
-
Deductibles: How much of the initial
costs must you absorb in the way of a deductible? Is it
charged only once in the calendar year? Is there a limit
of two or three deductibles per family or must each member
satisfy it?
-
Coinsurance: Beyond the deductible,
what percentage of the expense must you pay, 10%, 20%? Most
important - Is there a "stop-loss" provision which
eliminates all coinsurance and pays 100% of the charges
after you reach $l,000 or so in out-of-pocket expense?
-
Family benefit maximums should be
"unlimited" or extremely high; e.g., $1,000,000 due
to potential costs of a major surgery, hospitalization,
a series of family illnesses, etc.
-
"Inside limits," like "$200
for X-rays" etc., should be avoided in favor of "comprehensive
coverage"; i.e. a flat percentage of the cost incurred.
-
Determine age limits on child coverage.
Full-time students may be covered until 22 or 23.
-
Outpatient benefits should be examined
carefully since many procedures are now done on an outpatient
basis; e.g. pre-admission testing, diagnosis, etc., due
to the high costs of hospitalization.
-
Preferred Providers: Some medical
plans call for the use of a preferred supplier and provide
a list of doctors or hospitals from which you must
choose.
-
Health Maintenance Organizations
(HMOs) offer a different approach from traditional health
insurance, in which you pick the doctor, pay as you go
and receive reimbursement from an insurance company. With
an HMO, you or your employer pay an annual fee, for which
the plan's own doctors handle almost all of your health
needs.
HMOs typically cost less in that there
are usually no deductibles and they cover a higher percentage
of costs than traditional plans. However, since you are limited
to the services of this organization, it is important to ask:
-
Where do I go if I require hospitalization?
-
What about emergency treatment out of
the local area?
-
How substantial is the local staff? Are
all specialties represented?
-
How long must I wait to get an appointment?
Is the plan facility oversubscribed?
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