Insurance Buyer’s Guide

Introduction

If you have ever been sick or injured, you know how important it is to have health coverage. But if you’re confused about what kind is best for you, you’re not alone.

What types of health coverage are available? If your employer offers you a choice of health plans, what should you know before making a decision? In addition to coverage for medical expenses, do you need some other kind of insurance? What if your employer doesn’t offer health insurance or your self- employed? What if you are too ill to work? Or, if you are over 65, will Medicare pay for all your medical expenses?

These are questions that today’s consumers are asking; and these questions aren’t necessarily easy to answer.

This booklet should help. It discusses the basic forms of health coverage and includes a checklist to help you compare plans. It answers some commonly asked questions and also includes thumbnail descriptions of other forms of health insurance.

The term health insurance refers to a wide variety of insurance policies. These range from policies that cover the costs of doctors and hospitals to those that meet a specific need, such as paying for long-term care. Even disability insurance, which replaces lost income if you can’t work because of illness or accident, is considered health insurance, even though it’s not specifically for medical expenses.

But when people talk about health insurance, they usually mean the kind of insurance offered by employers to employees or the individual policies that you would purchase that covers medical bills, surgery, and hospital expenses. You may have heard this kind of health insurance referred to as comprehensive or major medical policies, alluding to the broad protection they offer. But the fact is, neither of these terms is particularly helpful to the consumer.

Today, when people talk about broad health care coverage, instead of using the term “major medical,” they are more likely to refer to fee-for-service or managed care. These terms apply to different kinds of coverage or health plans. Moreover, you’ll also hear about specific kinds of managed care plans: health maintenance organizations or HMOs, preferred provider organizations or PPOs, and point-of-service or POS plans.

While fee-for-service and managed care plans differ in important ways, in some ways they are similar. Both cover an array of medical, surgical, hospital & prescription drug expenses. Many employer plans include coverage for dentists and other providers. Ancillary benefits can also be purchase separately on an individual basis.

The section below is designed to acquaint you with the basics of fee-for-service and managed care plans. But remember: The detailed differences between one plan and another can only be understood by careful reading of the materials provided by insurers, your employee benefits specialist, or your agent or broker.



Interesting Fact:

There are 393 general acute care hospitals operating in California

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