Three
Top Health Insurance Questions - Answered
When choosing a
healthcare plan, which is more important: cheaper premiums or less
expensive co-payments?
Premiums are the amount of money you pay for your health benefits,
whether it be weekly or monthly. A co-payment is paid each time you
visit the doctor. With this in mind, consider your situation. Do you
visit the doctor a lot because you are either older or have small
children? If so, then higer premiums and lower co-payment will
likely save you more in the long run and make it difficult to
save money on health
insurance. However, if you are young,
health and rarely make doctor visits, you may opt for lower premiums
and higher co-pays. Also take into consideration the value of your
health coverage. If you choose a cheap health plan but it doesn't
pay for the benefits that you need, you are not getting good value
for your money.
1. What are HMO, PPO and POS? Which is best?
Each plan has its different features. Which is best is up to your
personal situation.
Health-maintenance organizations (HMOs)
HMOs are the least expensive but are also the least flexible. You
are required to select a primary-care physician with in the network
of physicians and you must obtain pre-authorizations to see
specialists and for certain medical procedures.
Point-of-service (POS)
POS plans also require you to select a primary-care physician from
their network but are more flexible than HMOs in other areas.
Preferred-provider organizations (PPO).
PPOs will typically allow you to visit a specialist or physician out
of their network, but will give policyholders a financial incentive
to stay within the group's network of practitioners. This incentive
comes in the form of reasonable co-payments.
2. What are pharmacy benefit tiers and what is a drug formulary?
A drug formulary is the list of medications that a health plan pays.
Most health plans that pay for prescription drugs have pharmacy
benefit tiers, which group certain medications together for pricing
purposes. The top tier is most expensive, usually holdling
brand-name drugs that may have co-pays that range form $25 - $50.
Lower tiers are the least expensive, usually holding generic
medications that may have co-pays that range from $5 to $10.
3. What are FSAs and HSAs?
Flexible spending account (FSA)
FSA is a benefit plan that allows you to pay for your out-of-pocket
healthcare costs on a pre-tax basis. Usually you will have this
money taken from your pay check before taxes are paid on your
income. You can later use these pre-tax dollars to pay for
out-of-pocket medical expenses. However, if you don't use this
money, you will lose it.
Health savings account (HSA)
HSA is designed to let you save money specifically for health costs
and you will receive a tax break in the process. Unlike a FSA, HSA
funds that are not used in one year can roll over into the next year
to help pay for future expenses. |
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