Family Medical Plans

Choosing a medical plan for your family is usually a balance of coverage value and expense.

When choosing a plan, remember to consider the following:

• ages and general health of your family members
• any plans to increase the size of your family
• current and anticipated frequency of visits to care providers
• current and future prescription needs (including eye care)

Be sure to consider how your needs will affect your overall plan premium and what you can expect to pay in annual co-pays.

Also, inquire as to whether your plan includes your current doctor(s) or if you will need to find a new health care provider.

Understanding the common terms associated with health care insurance will help you make a more educated decision. Important terms to help you identify your health insurance options are defined below.

Common Terms

• Co-Payment (co-pay): Your portion of the expense per visit to the doctor or per prescription. For example, you may be required to pay $20.00 for a doctor visit and $10.00 for each prescription you have filled.
• Coinsurance: A provision of an insurance policy that requires you to share costs incurred after the deductible has been met up to the yearly out-of-pocket maximum (calculated according to a set formula).
• Customary Fees: Fees the health insurance provider feels are customary for a given service provided by a health care provider. These fees are usually based on national averages.
• Deductible: The total amount in a given time (usually one year) of medical expenses you pay before your insurance begins to pay for the medical expenses. A common deductible is $500, though deductibles can range from $500 to $5,000.
• Out-of-Pocket Maximum: The amount of total health care costs for which you are responsible before the insurance company will cover 100% of your health care expenses.

Types of Plans

• Health Maintenance Organization (HMO): An organization with a network of doctors who have agreed to set rates and services. Your coverage may limit you to visiting health care providers within a particular network.
• Indemnity Plan (or Fee-for-Service): Medical coverage that functions similarly to your auto insurance. With such a plan, you are free to seek the medical services of any health care provider you wish, yet the insurance will not contribute any money to your medical expenses until you have paid your annual deductible. Even after reaching your deductible, the insurer will only pay what it considers customary fees at predetermined rates. Any expenses not covered at this point will also become your responsibility to pay.
• Preferred Provider Organization (PPO): A PPO creates a network of doctors from which you can choose. As with an HMO, you are required to pay a co-pay for each doctor’s visit or prescription filled. In a PPO, though, a doctor inside the network can refer you to a doctor outside of the network, and the PPO will pay for a portion of the visit as outlined in your coverage.

o Network: A collection of health care providers who have agreed to treat patients subscribing to a specific PPO plan for a predetermined (usually discounted) rate for each service offered.

o Out of Network: A health service provider who does not have a service fee agreement with a specific PPO. However, your co-insurance share will usually be much greater than if you use in-network providers.