Which Supplemental Health Insurance Plan is Right for You?
Do you need health care, but have limited financial means to get it? Supplemental health insurance plans can provide the coverage you need. These policies were created to fill in the gaps left when regular insurance policies fail to pay for certain medical treatments. Depending on your age, medical history, and your budget, there are supplemental health insurance plans that will fit your needs.
The three main types of supplemental health insurance are health maintenance organizations (HMOs), preferred provider organizations (PPOs), and point-of-service (POS) plans. Each type has its own benefits and drawbacks. HMOs are usually the least expensive. They offer the most flexible plans with a minimum number of covered services, and usually have a co-pay program for doctor visits, physicals, and dental care.
A typical plan for an individual would include an HMO with a standard monthly premium and a maximum out-of-pocket expense. There are typically no deductibles, coinsurance, or any restrictions on the doctor visits. There is also a maximum out-of-package amount for emergency care. Some HMOs also offer major medical coverage at a reduced rate, or a coverage that covers only hospital expenses. PPOs, on the other hand, are much like a health insurance plan, except with a lower maximum out-of-pocket expense. They may cover the same hospital expenses as HMOs, but the providers are often restricted to particular hospitals.
One disadvantage to PPOs is that you can often end up paying more for out-of-pocket costs than you would with a regular health plan. When you opt for a PPO, you are responsible for the entire cost. However, a PPO can be less expensive if you select the right health plan. For example, if you have a good credit rating and are in good health, you may be able to get a substantial deductible from a PPO. Your regular health plan may not cover the deductible completely, and this could result in a substantial out-of-pocket expense.
Another advantage plan for those who do not want to pay for a premium is the coinsurance plan for the Part A and Part B of a traditional health insurance plan. This plan provides for a percentage of your annual out-of-package costs when you pay your premiums. It is essentially a higher deductible plan. Part A can be renewed annually, and Part B must be renewed monthly. Like a PPO, if you have a major illness and need a major operation, you will likely have to pay a portion of your expenses out-of-pocked, but the advantage plans for those who do not need this type of coverage have a lower percentage initially.
In addition to providing cash benefit to those who need coverage when they become ill, there are supplemental policies that may provide coverage in the event of an emergency. If your policy covers major illnesses and accidents, it may not cover critical illnesses. When this happens, it is important to review your policy for a critical illness rider. Many states have regulations on how much the critical illness policy should cost and there is a cap on the amount that the premiums can rise above.
Medical payments under these plans are usually limited to a percentage of your regular health care costs. Most of these policies may require you to visit a doctor at least once every six months, although the deductible may increase with annual medical bills. When comparing insurance plans for cost and benefits, do not compare annual deductibles or co-pays with the costs of actual hospital indemnity coverage. If you visit the hospital often, you are more likely to be able to pay the hospital indemnity.
One of the most popular supplemental insurance plans available is the Special Health Plan, also called HMO or Provider Network. This type of plan requires you to choose one of the network providers that accept your primary care doctor. With this option, you will only pay the deductible and may be subject to a co-pay. The monthly cost of this type of supplemental health plan is significantly lower than regular health plans.