Medical Insurance Options

With the costs of cancer treatment and other common forms of catastrophic illness reaching to six figures or more, maintaining some sort of health insurance is a must for most of us. Without coverage, the unlucky among us could potentially be forced into bankruptcy, losing their cars and even their homes, as a result of anyone in their family being faced with a major medical issue.

Fee-for-Service Plans

• Fee-for-service plans, also called "indemnity plans," provide the broadest coverage and the most flexibility for the patient. With a fee-for-service plan, you have the freedom to choose your medical care provider. You do not have to stay within an approved list of care providers, nor do you have to go through a primary care physician acting as a gatekeeper. The insurance company pays you or the provider for the service according to charges that are "usual and customary" in the area. These policies are extremely flexible and provide good coverage and give you a lot of options. They also tend to be pricier than other kinds of plans with similar benefit levels.

Health Maintenance Organizations

• Health maintenance organizations, or HMOs, are networks that contract with select local care providers. These local providers agree to provide discounts to the HMO in exchange for the prospect of a steady stream of business from the HMO members. Typically, HMO members must seek nonemergency care from a list of approved providers. Additionally, the HMO assigns a "primary care physician" to act as your care coordinator. This physician, called a "PCP," also acts as a gatekeeper to the health care system. The PCP must approve all nonemergency visits to a specialist. HMOs tend to emphasize preventive care and typically charge modest premiums compared with the level of benefits. This may be a good option for cost-sensitive individuals and families.

Preferred Provider Organizations

• The preferred provider organization, or PPO, is a variant of the HMO concept. PPOs also contract with a limited number of care providers. However, PPOs do not require members to get a referral by a primary care physician to get the plan to cover care by a specialist. All things being equal, the PPO plan will generally charge higher premiums than the HMO plan, but not as much as a typical fee-for-service plan offering comparable benefits.

Health Savings Accounts and High Deductible Health Plans

• If you are self-employed, or you do not have access to any other plan, you may be able to qualify for a health savings account/high-deductible health plan combination. The health savings account allows you to set money aside for future health care expenses on a tax-advantaged basis. Contributions are tax free, and the money grows tax-deferred inside the HSA. Withdrawals are tax free, provided they are used for qualified health expenses. You may only contribute to an HSA if you also own a qualified high-deductible health insurance program. These can be for individuals or families. Contribution limits, minimum and maximum deductibles apply.

Coverage For Patients With Medical Conditions

• If you have a preexisting medical condition, you have fewer options. While those who are healthy can purchase their own coverage through an agent in the private market, you may not have that option. In this case, you may wish to find a job with an employer who offers a group medical insurance plan. These are generally not medically underwritten; you can usually get coverage regardless of your health. You may also be eligible for coverage under your state's high-risk pool. Requirements, coverage and eligibility varies widely by state.