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How to Choose a Health Insurance Policy

With the rising cost of medical treatments these days, health insurance is necessary for just about everyone. But policies can vary dramatically in coverage, cost and other features, so it’s important to understand and review your options well before deciding which one to buy. You also have lots of insurance companies to choose from, which may make choosing a bit more difficult. Of course, if you do your homework, the task will be much easier.

Policy Type

There are various types of policies providing health coverage, and these are the most common:

Health Maintenance Organizations (HMOs)

An HMO policy only allows you to use healthcare providers within the network. To see a specialist, you have to ask your primary care physician for a referral.

Preferred Provider Organizations (PPOs)

PPO health policies also have networks, but you are not limited to in-network health care providers, and you also don’t need a referral to see a specialist.

Exclusive Provider Organizations (EPOs)

EPO’s are somewhat a combination of HMOs and PPOs. You have to use in-network providers, but there’s no need to get a referral when you need a specialist.

Point of Service (POS)

The reverse of EPO plans are known as PPO plans, which are also the least popular of all. You need a referral to see a specialist, but you can see any provider in or out of their network.

High Deductible vs. Low Deductible Plans

As a general rule, higher-deductible plans will have lower monthly premiums. Your deductible is the minimum amount you need to pay with your own money before your policy starts shouldering the costs. You will find a high-deductible plan favorable when your yearly health expenses are usually low. A low-deductible policy will be more beneficial otherwise.

Coverage Comparisons

Network and policy regulaions are the two most crucial factors that ultimately determine whether a plan is right for you or not. Even if you choose a plan that allows you to use out-of-network providers, you’ll still be better off going in-network because that will reduce your costs. And the rules that a plan has in terms of what’s covered or not – and how much your copays will be – can also make a big impact on how useful a certain policy is for you.

How to Choose the Best

Can’t choose between two seemingly perfect policies? Just multiply each plan’s monthly premium by 12 to know annual cost. Next, add to that your maximum out-of-pocket.

The result is the amount you’ll likely spend on health care if you had at least one significant medical expense through the course of the year, . Pick the plan that yields the lower number.

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