What Kind of Questions Should You Ask About Health Insurance?

Health insurance is one of the most important coverages someone can buy. Unfortunately, the health insurance industry and its products are often too complex for the average citizen to understand adequately at first glance. Therefore, anyone considering the purchase of a health insurance policy should ask multiple questions about the different aspects of the plan to guarantee they understand the full scope of coverage.

Function

• A health insurance policy provides payment to medical professionals if and when an insured person receives treatment. Additionally, health insurance policies typically provide a benefit that allows an insured person to obtain necessary prescription drugs at an affordable rate below retail pricing.

Types

• There are many types of health insurance policies in the United States. If you understand the differences between them you'll know how to choose the best plan for you. The most common type of health insurance policy is a health maintenance organization, or HMO. This type of policy provides coverage to insured members only when they receive treatment from medical providers within an existing negotiated network. The second most common type of health insurance policy is a preferred provider organization, or PPO. This type of coverage is similar to that of an HMO, but also allows the insured person to receive treatment from physicians outside the established network. Other, less common, types of health insurance plans are point of service (POS), high-deductible health savings account plans (HSA), medical savings accounts (MSA), exclusive provider organization (EPO), and traditional plans.

Network Providers

• When evaluating or considering a health insurance policy, ask about the size of the existing network and whether your current physicians and facilities are participating providers in that network. A health insurance company can easily answer these questions, but those answers could make a significant difference to you if you are loyal to your current physicians and/or do not want to have to change doctors.

Features

• Other main features of a health insurance policy to investigate before enrolling include: deductibles, copays, prescription costs, emergency room visit copays, hospitalization deductibles and any other potential out-of-pocket expenses. A health insurance policy may have many small incidental costs that will become the obligation of the insured person if and when treatment is rendered. Consider all these costs against the monthly premium before choosing a health insurance policy.

Considerations

• Ask detailed questions about potential out-of-pocket expenses of a health insurance policy. Those programs with very small monthly premiums often have significant expenses and obligations with each treatment received. The only way to lower monthly premiums is to increase the insured person's costs for services. For example, if one policy's monthly premium is low but includes a $50 copay for every doctor's visit and discounts prescriptions only 20 percent, the long-term cost may be more. Also ask if there is a maximum out-of-pocket expense per year for the insured person.