PERSONAL INSURANCE INCLUDES:
Health
Disability
Life
Long-Term Care
Health
Medical expense plans pay expenses incurred for diagnosis and treatment of medical conditions. There are three major types of plans/programs.
Reimbursement Insurance Plans
Full freedom-of-choice plans allow you to choose any doctor and hospital. These policies call for a "deductible." This means that you must pay a stated amount first, before the insurance company begins paying benefits. The deductible commonly runs from $100 to several thousand dollars; and the rule here is the higher the deductible you are willing to accept, the lower the cost of your insurance. "Co-insurance"- the part of the medical costs you are obligated to pay with your insurer, is also involved.
For example, most freedom of choice plans will pay 75% to 85% of all eligible medical costs above the deductible, you pay the remainder. In other words, a medical cared bill totaling $10,000 of eligible expenses would leave you paying $1,500 to $2,500 above the deductible. These policies that require you to pay a portion of the costs above the deductible, usually feature a "stop loss" provision. This is the point where you stop sharing the costs with the insurance company and the insurance company pays all the bills at 100% for the balance of the current calendar year.
Preferred Provider Organizations (PPO) Plans allow the insureds to choose a doctor or hospital from a list of "preferred" providers in order to receive maximum benefits. If you go to a doctor or hospital who is not a member of the preferred list, the plan will cover a lessor percentage of the costs. PPO plans have many of the same features of freedom-of-choice plans including coinsurance and stop loss provisions. Check with the insurance carrier BEFORE you use the plan to determine if your physician or hospital is a contracting provider with your plan. Also, it is your responsibility under these types of plans to make sure your doctor refers you to other "preferred" providers.
Prepaid Health Contracts
Health Maintenance Organizations (HMOs) were formed with the idea of controlling health costs and providing preventive health care before members become ill. HMOs are comprised of hospitals, doctors and allied medical personnel who have contracted to provide health care to members in return for a pre-paid monthly charge.
When joining an HMO, members select a doctor, the "primary care physician," from a list provided by the HMO. Typically family practioners, internists, and pediatricians; these doctors manage all medical care including referrals to specialists and whether further lab tests or x-rays are needed. The system is designed to eliminate any unnecessary care which would ultimately increase total health care costs.
HMO's provide incentives for individuals to seek medical care. Office visits are provided for small copays- usually $10 or $15. Prescriptions are available for small copays also. Hospital expenses are usually covered at 100% for little or no copays. With an HMO, you do not have the option of going to a medical provider who is NOT part of the HMO network. HMO's are available on both a group and individual basis.
Government Sponsored Health Programs
Managed Risk Medical Insurance Board (MRMIB)--- The State of California sponsors a health care plan for individuals who have been unable to secure health care coverage through normal channels. To be eligible for this plan, an individual must have been declined for coverage in the past 12 months and meet certain residency requirements as well as waitng periods before benefits are available. Ask your agent for more information or call 1-800-289-6574.
Health Insurance Plan of California (HIPC)--- This program is also sponsored by the State of California. HIPC is a group health insurance pool for small employers (3-50 full-time employees).
It guarantees coverage to employees in any of one of 20 different health care plans offered mainly through HMO-type health plans. Your employer can get more information from an insurance agent or by calling HIPC at 1-800-447-2937.
Medicare--- A federal program which provides medical coverage for people over the age of 65 and for those who are permanently disabled. Contact your local Social Security office for more information and enrollment instructions.
