- What Are My Health Plan Choices?
- Where Do I Get These Health
- What Plan Benefits Are Offered?
- What Is Most Important to Me
in a Plan?
- How Do I Compare Health Plans?
- How Do I Find Out About Quality?
- How Can I Get the Most from
- How Do I Obtain Care?
- What if I Have to Go to the
- What if I Am Not Satisfied
with My Care?
Health care in America is
changing rapidly. Twenty-five years ago, most people in the
United States had indemnity insurance coverage. A person
with indemnity insurance could go to any doctor, hospital,
or other provider (which would bill for each service given),
and the insurance and the patient would each pay part of
But today, more than half
of all Americans who have health insurance are enrolled in
some kind of managed care plan, an organized way of both
providing services and paying for them. Different types of
managed care plans work differently and include preferred
provider organizations (PPOs), health maintenance organizations
(HMOs), and point-of-service (POS) plans.
You've probably heard these
terms before. But what do they mean, and what are the differences
between them? And what do these differences mean to you?
This page can help you make
sense of your choices for getting health care insurance:
- See the questions and answers on important things you
should know when "Choosing a Plan."
- To get the most out of the plan you choose, see the
tips in the section "Using Care."
- For more help, see "Sources of Additional Information."
Even if you don't get to
choose the health plan yourself (for example, your employer
may select the plan for your company), you still need to
understand what kind of protection your health plan provides
and what you will need to do to get the health care that
you and your family need. The more you learn, the more easily
you'll be able to decide what fits your personal needs and
between health plans is not as easy as it once was. Although
there is no one "best" plan, there are some plans that will
be better than others for you and your family's health needs.
Plans differ, both in how much you have to pay and how easy
it is to get the services you need. Although no plan will pay
for all the costs associated with your medical care, some plans
will cover more than others. Almost all plans today have ways
to reduce unnecessary use of health care-and keep down the
costs of health care, too. This may affect how easily you get
the care you want, but should not affect how easily you get
the care you need.
Plans change from year to
year, so you should carefully consider each plan, using the
questions outlined in this booklet. If you get health insurance
where you work, you should start with your employee benefits
office. Its staff should be able to tell you what is covered
under the plans available. You can also call plans directly
to ask questions.
Health insurance plans are
usually described as either indemnity (fee-for-service) or
managed care. These types of plans differ in important ways
that are described below. With any health plan, however,
there is a basic premium, which is how much you or your employer
pay, usually monthly, to buy health insurance coverage. In
addition, there are often other payments you must make, which
will vary by plan. In considering any plan, you should try
to figure out its total cost to you and your family, especially
if someone in the family has a chronic or serious health
and managed care plans differ in their basic approach. Put
broadly, the major differences concern choice of providers,
out-of-pocket costs for covered services, and how bills are
paid. Usually, indemnity plans offer more choice of doctors
(including specialists, such as cardiologists and surgeons),
hospitals, and other health care providers than managed care
plans. Indemnity plans pay their share of the costs of a service
only after they receive a bill.
Managed care plans have agreements
with certain doctors, hospitals, and health care providers
to give a range of services to plan members at reduced cost.
In general, you will have less paperwork and lower out-of-pocket
costs if you select a managed care type plan and a broader
choice of health care providers if you select an indemnity-type
Over time, the distinctions
between these kinds of plans have begun to blur as health
plans compete for your business. Some indemnity plans offer
managed care-type options, and some managed care plans offer
members the opportunity to use providers who are "outside" the
plan. This makes it even more important for you to understand
how your health plan works.
Besides indemnity plans,
there are basically three types of managed care plans: PPOs,
HMOs, and POS plans.
an indemnity plan (sometimes called fee-for-service), you can
use any medical provider (such as a doctor and hospital). You
or they send the bill to the insurance company, which pays
part of it. Usually, you have a deductible-such as $200-to
pay each year before the insurer starts paying. Once you meet
the deductible, most indemnity plans pay a percentage of what
they consider the "Usual and Customary" charge for covered
services. The insurer generally pays 80 percent of the Usual
and Customary costs and you pay the other 20 percent, which
is known as coinsurance.
the provider charges more than the Usual and Customary rates,
you will have to pay both the coinsurance and the difference.
The plan will pay for charges
for medical tests and prescriptions as well as from doctors
and hospitals. It may not pay for some preventive care, like
Provider Organization (PPO). A PPO is a form of managed care
closest to an indemnity plan. A PPO has arrangements with doctors,
hospitals, and other providers of care who have agreed to accept
lower fees from the insurer for their services. As a result,
your cost sharing should be lower than if you go outside the
network. In addition to the PPO doctors making referrals, plan
members can refer themselves to other doctors, including ones
outside the plan.
If you go to a doctor within
the PPO network, you will pay a copayment (a set amount you
pay for certain services-say $10 for a doctor or $5 for a
prescription). Your coinsurance will be based on lower charges
for PPO members.
If you choose to go outside
the network, you will have to meet the deductible and pay
coinsurance based on higher charges. In addition, you may
have to pay the difference between what the provider charges
and what the plan will pay.
Health Maintenance Organization
(HMO). HMOs are the oldest form of managed care plan. HMOs
offer members a range of health benefits, including preventive
care, for a set monthly fee. There are many kinds of HMOs.
If doctors are employees of the health plan and you visit
them at central medical offices or clinics, it is a staff
or group model HMO.
HMOs contract with physician groups or individual doctors who
have private offices. These are called individual practice
associations (IPAs) or networks.
HMOs will give you a list
of doctors from which to choose a primary care doctor. This
doctor coordinates your care, which means that generally
you must contact him or her to be referred to a specialist.
With some HMOs, you will
pay nothing when you visit doctors. With other HMOs there
may be a copayment, like $5 or $10, for various services.
If you belong to an HMO, the plan only covers the cost of
charges for doctors in that HMO. If you go outside the HMO,
you will pay the bill. This is not the case with point-of-service
Point-of-Service (POS) Plan.
Many HMOs offer an indemnity-type option known as a POS plan.
The primary care doctors in a POS plan usually make referrals
to other providers in the plan. But in a POS plan, members
can refer themselves outside the plan and still get some
coverage. If the doctor makes a referral out of the network,
the plan pays all or most of the bill. If you refer yourself
to a provider outside the network and the service is covered
by the plan, you will have to pay coinsurance.
Your primary care doctor will
serve as your regular doctor, managing your care and working
with you to make most of the medical decisions about your care
as a patient. In many plans, care by specialists is only paid
for if your are referred by your primary care doctor. An HMO
or a POS plan will provide you with a list of doctors from
which you will choose your primary care doctor (usually a family
physician, internists, obstetrician-gynecologist, or pediatrician).
could mean you might have to choose a new primary care doctor
if your current one does not belong to the plan.
PPOs allow members to use
primary care doctors outside the PPO network (at a higher
cost). Indemnity plans allow any doctor to be used.
may be able to get group health coverage-either indemnity or
managed care-through your job or the job of a family member.
Many employers allow you to join or change health plans once
a year during open enrollment.
once you choose a plan, you must keep it for a year. Discuss
choices and limits with your employee benefits office.
you are self-employed or if your company does not offer group
policies, you may need to buy individual health insurance.
Individual policies cost more than group policies. Some organizations-such
as unions, professional associations, or social or civic groups-offer
health plans for members.
may want to talk to an insurance broker, who can tell you more
about the indemnity and managed care plans that are available
for individuals. Some States also provide insurance for very
small groups or the self-employed.
age 65 or older and people with certain disabilities can be
covered under Medicare, a Federal health insurance program.
In many parts of the country, people covered under Medicare
now have a choice between managed care and indemnity plans.
They also can switch their plans for any reason.
they must officially tell the plan or the local Social Security
Office, and the change may not take effect for up to 30 days.
Call your local Social Security office or the State office
on aging to find out what is available in your area.
covers some low-income people (especially children and pregnant
women), and disabled people. Medicaid is a joint Federal-State
health insurance program that is run by the States.
some cases, States require people covered under Medicaid to
join managed care plans. Insurance plans and State regulations
differ, so check with your State Medicaid office to learn more.
pre-existing condition is a medical condition diagnosed or
treated before joining a new plan. In the past, health care
given for a pre-existing condition often has not been covered
for someone who joins a new plan until after a waiting period.
However, a new law-called the Health Insurance Portability
and Accountability Act changes the rules.
Under the law, most of which
goes into effect on July 1, 1997, a pre-existing condition
will be covered without a waiting period when you join a
new group plan if you have been insured the previous 12 months.
means that if you remain insured for 12 months or more, you
will be able to go from one job to another, and your pre-existing
condition will be covered-without additional waiting periods-even
if you have a chronic illness. If you have a pre-existing condition
and have not been insured the previous 12 months before joining
a new plan, the longest you will have to wait before you are
covered for that condition is 12 months.
To find out how this new
law affects you, check with either your employer benefits
office or your health plan.
plans provide basic medical coverage, but the details are what
counts. The best plan for someone else may not be the best
plan for you. For each plan you are considering, find out how
- Physical exams and health screenings.
- Care by specialists.
- Hospitalization and emergency care.
- Prescription drugs.
- Vision care.
- Dental services.
Also ask about:
- Care and counseling for mental health.
- Services for drug and alcohol abuse.
- Obstetrical-gynecological care and family planning services.
- Ongoing care for chronic (long-term) diseases,
conditions, or disabilities.
- Physical therapy and other rehabilitative
- Home health, nursing home, and hospice
- Chiropractic or alternative health care,
such as acupuncture.
- Experimental treatments.
Some plans offer members
health education and preventive care, but services differ.
Ask questions such as:
- What preventive care is offered, such as shots for children?
- What health screenings are given, such as breast exams
and Pap smears for women?
- Does the plan help people who want to quit smoking?
choosing a plan, you have to decide what is most important
to you. All plans have tradeoffs. Ask yourself these questions:
- How comprehensive do I want coverage of health care services
- How do I feel about limits on my choice of doctors or
- How do I feel about a primary care doctor referring me
to specialists for additional care?
- How convenient does my care need to be?
- How important is the cost of services?
- How much am I willing to spend on premiums and other
health care costs?
- How do I feel about keeping receipts and filing claims?
might also want to think about whether the services a plan
offers meet your needs. Call the plan for details about coverage
if you have questions. Consider:
- Life changes you may be thinking about, such as starting
a family or retiring.
- Chronic health conditions or disabilities that you or
family members have.
- If you or anyone in your family will need care for the
- Care for family members who travel a lot, attend college,
or spend time at two homes.
After you review what benefits
are available and decide what is important to you, you can
compare plans. Many things should be considered. These include
services offered, choice of providers, location, and costs.
The quality of care is also a factor to think about.
at the services offered by each plan. What services are limited
or not covered? Is there a good match between what is provided
and what you think you will need? For example, if you have
a chronic disease, is there a special program for that illness?
Will the plan provide the medicines and equipment you may need?
Find out what types of
care or services the plan won't pay for. These usually
are called exclusions.
indemnity and managed care plans cover treatments that are
experimental. Ask how the plan decides what is or is not
experimental. Find out what you can do if you disagree with
a plan's decision on medical care or coverage.
If you get health care coverage
at work, or through a trade or professional association or
a union, you are almost certainly enrolled under a group
contract. Generally, the contract is between the group and
the insurer, and your employer has done comparison shopping
before offering the plan to the employees. Nevertheless,
while some employers only offer one plan, some offer more
than one. Compare plans carefully!
Location is a very important
factor to consider when deciding on a plan. Where will you
go for your health care with the plan that you're considering?
Are these places near where you work or live? How does the
health care plan handle care when you are away from home?
health insurance plan will cover every expense. To get a true
idea of what your costs will be under each plan, you need to
look at how much you will pay for your premium and other costs.
- Are there deductibles you must pay before the insurance
begins to help cover your costs?
- After you have met your deductible, what part of your
costs are paid by the plan?
- Does this amount vary by the type of service, doctor,
or health facility used?
- Are there copayments you must pay for certain services,
such as doctor visits?
- If you use doctors outside a plan's network, how much
more will you pay to get care?
- If a plan does not cover certain services
or care that you think you will need, how much will you have
- Are there any limits to how much you must
pay in case of major illness?
- Is there a limit on how much the plan
will pay for your care in a year or over a lifetime? A
single hospital stay for a serious condition could cost
hundreds of thousands of dollars.
You can't know in advance
what your health care needs for the coming year will be.
But you can guess what services you and your family might
need. Figure out what the total costs to your family would
be for these services under each plan.
is hard to measure, but more and more information is becoming
available. There are certain things you can look for and questions
you can ask. Whatever kind of plan you are considering, you
can check out individual doctors and hospitals. For doctors,
see "Tips on Choosing a Doctor."
Many managed care plans are
regulated by Federal and State agencies. Indemnity plans
are regulated by State insurance commissions. Your State
Department of Health or insurance commission can tell you
about any plan you are interested in.
You can also find out if
the managed care plan you are interested in has been "accredited," meaning
that it meets certain standards of independent organizations.
Some States require accreditation if plans serve special
groups, such as people in Medicaid. Some employers will only
contract with plans that are accredited.
Several national organizations
review and accredit plans and institutions. You can contact
these organizations to see if a plan you are considering,
or an institution in the plan, is accredited.
Another approach is to ask
the plan how it ensures good medical care. Does the plan
review the qualifications of doctors before they are added
to the plan? Plans are supposed to review the care that is
given by their doctors and hospitals. How does the plan review
its own services, and has it made changes to correct problems?
How does the plan resolve member complaints?
managed care plans survey members about their health care experiences.
Ask the plan for a report of the survey results.
Some plans and independent
organizations are also beginning to produce "report cards." These
reports often include satisfaction survey results and other
information on quality, such as if a plan provides preventive
care (for example, shots for children and Pap smears for
women) or if the plan follows up on test results. Report
cards may also include information on how many members stay
in or leave the plan, how many of the plan's doctors are
board certified, or how long you may have to wait for an
Report cards can only give
you an idea of how a plan works and may not give a full picture
of a plan's quality. Ask plans if their activities have been
reported in report cards developed by outside groups (business
or consumer organizations). Also keep any eye out for magazine
articles that rate health plans.
Finally, you can talk to
current members of the plan. Ask how they feel about their
experiences, such as waiting times for appointments, the
helpfulness of medical staff, the services offered, and the
care received. If there are programs for your particular
condition, how are the patients in it doing?
doctor will be your partner in care, so it is important to
choose carefully from the doctors available to you. In some
managed care plans, you will generally be limited to choosing
from only certain doctors; in other plans, some doctors may
be "preferred," which means they are part of a network and
you will pay less if you use them. Ask your plan for a list
or directory of providers. The plan may also offer other help
in choosing. You can ask doctors you know, medical societies,
friends, family, and coworkers to recommend doctors. You may
also contact hospitals and referral services about doctors
in your area.
Once you have the names
of doctors who interest you, make sure they are accepting
new patients. Here's how to check doctors out:
- Ask plans and medical offices for information on their
doctors' training and
- Look up basic information about doctors in the Directory
of Medical Specialists,
- available at your local library. This reference has
up-to-date professional and biographic information on
about 400,000 practicing physicians.
- Use "AMA Physician Select," which is the American Medical
Association's free service on the Internet for information
about physicians ( www.ama-assn.org/aps/amahg.htm ).
You may also
want to find out:
Is the doctor board certified? Although
all doctors must be licensed to practice medicine,
some also are board certified. This means the doctor
has completed several years of training in a specialty
and passed an exam. Call the American Board of Medical
Specialties at 800-776-2378 for more information.
Have complaints been registered
or disciplinary actions taken against the doctor? To
find out, call your State Medical Licensing Board.
Ask Directory Assistance for the phone number.
Have complaints been registered
with your State department of insurance? (Not all departments
of insurance accept complaints.) Ask Directory Assistance
for the phone number.
Once you have narrowed
your search to a few doctors, you may want to set up "get
acquainted" appointments with them. Ask what charge there
might be for these visits, if any.
Such appointments give
you a chance to interview the doctors-for example, to find
out if they have much experience with any health conditions
you may have.
will get the best care if you:
Read your health insurance policy
and member handbook. Make sure you understand them, especially
the information on benefits, coverage, and limits. Sales
materials or plan summaries cannot give you the full
See if your plan has a magazine or
newsletter. It can be a good source of information on
how the plan works and on important policies that affect
Talk to your health benefits officer
at work to learn more about your policy.
Ask how the plan will notify you of
changes in the network of providers or covered services
while you are part of the plan.
Ask questions and insist on clear answers.
Ask about the risks and benefits of
tests and treatments. Tell your doctor what you like and
dislike about your choices for care.
Make sure you understand and can follow
the doctor's instructions. You may want to bring another
person along or take notes to help you remember things.
Write down your concerns. Start a
health log of symptoms to help you better explain any
health problems when you meet with your doctor.
Set up health files for family members
at home. This will help you to monitor care. Include
health histories of shots, illnesses, treatments, and
Ask for copies of lab results. Keep
a list of your medicines, noting side effects and other
problems (such as other drugs and foods that should not
be taken at the same time).
what you can expect from your health plan and how it works
are key steps to getting the care you need.
Ask these questions:
When are the offices open? What if
I need care after hours?
How do I make appointments? How quickly
can I expect to be seen for illness or for routine care?
If I need lab tests, are they done
in the doctor's office or will I be sent to a laboratory?
Will most of my appointments be with
the primary care doctor? Will nurse practitioners or physician's
assistants sometimes give care as well?
Is there an advice hotline? Some plans
have toll-free phone services that help members decide
how to handle a problem that may not require a doctor's
Find out how your plan provides
care outside the service area and what you must do to get
care. This is especially important if you travel often, are
away from home for long periods, or have family members away
time to find out what rules your plan has on hospital care
is before you need it.
Unless it is a medical emergency,
your health plan or primary care doctor will probably have
to give advance approval (preadmission certification) for
you to go to the hospital. Otherwise, the cost of your hospital
care may not be covered. Ask these questions:
- What hospitals are part of the plan network?
- Is there a limit on how long I can stay in the hospital?
- Who decides when I am to be discharged?
- Will needed follow-up care, such as nursing home
or home health care, be covered by the plan?
- If I have a serious medical problem, will the plan
provide someone to oversee care and make sure my needs
Ask how your plan handles
getting a second doctor's opinion on whether surgery or another
treatment is needed. Are second opinions encouraged or required?
If you have a true medical
emergency, you should go to the nearest hospital as fast
as possible. It is important for you to know what kind of
medical problems are defined as emergencies and how to arrange
for ambulance service, if needed. Most plans must be told
within a certain time after emergency admission to a hospital.
If the hospital is not part of the plan network, you may
be transferred to a network hospital when your condition
is stable. Ask these questions:
How does the plan define "emergency
care?" What conditions or injuries are considered emergencies?
How does the plan handle "urgent care" after
normal business hours? Urgent care is for problems that
are not true emergencies but still need quick medical
attention. Check with your plan to find out what it considers
to be urgent care. Examples may include sore throats
with fever, ear infections, and serious sprains. Call
your primary care doctor or the plan's hotline for advice
about what to do. The plan may also have urgent care
centers for members.
How do I get urgent care or hospital
care if I am out of the area? How must I tell the plan
and how soon after I get the care?
the best care and services means understanding how your health
plan works, what your rights are, and how to complain if you
need to. You have the right to get copies of test results as
well as medical information about yourself. If you are in a
managed care plan, you can ask to change your primary care
doctor if you are unhappy with the relationship. You may also
be able to switch plans during open enrollment.
Most plans have an appeals
process that both you and your doctor may use if you disagree
with the plan's decisions. If your plan refuses to provide
or pay for services, you can complain or file a grievance
about any decision you feel is unfair -- or you can appeal
it.You can contact the member services division of your plan
for more information or to complain. Use your plan's complaint
process fully before taking other action.
Be sure to keep
written records of:
All correspondence with the plan
Claims forms and copies of bills
Phone conversations -- the date and
time, the people you speak with, and the nature of each
If the plan does not satisfy
you, you may decide to bring the matter to the attention
of your employee benefits manager, your State insurance commissioner,
your State department of health, or the legal system. If
you are a Medicare or Medicaid beneficiary, you have additional
ways through those programs to file a grievance about the
care received from a plan or provider. For information, contact
your State's medical Peer Review Organization or State Medicaid
consumer's guide was developed by the Agency for Health Care
Policy and Research, U.S. Department of Health and Human
Services, Rockville, MD, in cooperation with the Health Insurance
Association of America, Washington, DC. Reviewed by Michael
W. Smith, MD, April 2002.