CHOOSING THE RIGHT HEALTH INSURANCE COVERAGE TO PROTECT
If you do not have medical insurance to help pay bills, a serious injury or
illness can be financially devastating to you and your family. Even if you do
have health insurance, too little or the wrong kind of coverage might still mean
your family could suffer under the weight of medical bills.
Right now is the best time to review your family's health insurance needs, to
ensure you have the most ideal coverage to protect your family's future.
Types of health insurance that are available:
Major Medical Plans
This type of policy is usually effective in covering serious illness or injury
where costs are high. Hospital care, drugs and doctors’ visits are generally
covered. These benefits can be delivered in several different ways:
- Indemnity plans – These plans usually provide the most flexibility in
choosing where to receive care and typically have a deductible; i.e., the
amount you pay before the insurance company begins paying benefits.
- Preferred Provider Organization (PPO) plans – In these major medical
plans, the insurance company enters into contracts with selected hospitals
and doctors to furnish services at a discounted rate. As a member of a PPO,
you may be able to seek care from a doctor or hospital that is not a
preferred provider, but you will probably have to pay a higher deductible or
- Health Maintenance Organization (HMO) plans – These major medical plans
usually require you to choose a primary care physician (PCP) from a list of
network providers. If you need care from any network provider other than
your PCP, you might have to get a referral from your PCP to see that
provider. You must receive care from a network provider in order to have
your claim paid through the HMO. Treatment received outside the network is
usually not covered, or covered at a significantly reduced level.
- Point of Service (POS) plans – These major medical plans are a hybrid of
the PPO and HMO models. They are more flexible than HMOs, but require you to
select a primary care physician (PCP). Like a PPO, you can go to an
out-of-network provider and pay more of the cost.
Limited Benefit Plans
These types of policies provide limited coverage for a particular health care
setting, ailment or disease. Here are some of the options that might be
available to you:
Basic Hospital Expense Coverage – Covers a period of usually not less than 31
days of continuous in-hospital care and certain hospital outpatient services.
Basic Medical-Surgical Expense Coverage – Covers costs associated with a
necessary surgery, including a certain number of days (usually not less than 21
days) of in-hospital care.
Hospital Confinement Indemnity Coverage – Covers a fixed amount (usually not
less than $40) for each day that you are in a hospital. The benefits paid are
not based on your actual expenses.
Accident Only Coverage – Covers death, dismemberment, disability or hospital and
medical care caused by an accident. Specified accident coverage that covers only
certain accidents may also be purchased.
Specified Disease Coverage –- Covers diagnosis and treatment of a specifically
named disease or diseases; such as cancer.
Other Limited Coverage – You may purchase insurance covering only dental or
vision or other specified care.
Discount Plans and Risk-Sharing Plans
Discount plans and risk-sharing plans are not insurance plans! Before signing,
be sure to understand how the program works, and what benefits it offers you or
Discount Plans – You might receive advertisements from plans offering discounts
on health care for a monthly fee. These are not health insurance plans and
participants do not have the same protections as under licensed health insurance
plans. Insurance commissioners strongly recommend that you thoroughly
investigate any plan promising deep discounts for a “low” monthly fee and weigh
the benefits against the cost carefully.
Non-Licensed Risk-Sharing Plans – You may receive offers to join a group or
association that will take your monthly payments, put them in a savings account
(or trust) with other participants’ money, and then help pay some of your health
care costs, as needed. Such arrangements are not insurance and the participants
do not have the protections available to purchasers of licensed insurance plans.
State insurance regulators strongly recommend that you thoroughly
investigate such plans before joining.
State Consumer Protections
States provide a variety of important protections through state law. These might
- The appeal of coverage decisions within the insurance company;
- The appeal of coverage decisions to an impartial external reviewer;
- Prompt payment of claims;
- Access to certain specialists and health care providers;
- Coverage of specific treatments and services.
If you have questions about protections in Florida, contact the Department of
Financial Services' consumer service helpline at 1-877-MyFLCFO.
Other Important Consumer Protections
COBRA Continuation Coverage – If you purchase insurance coverage through your
employer and your employer has 20 or more employees, when you leave your job,
you are entitled to continuation coverage by the federal Consolidated Omnibus
Budget Reconciliation Act (COBRA). Your state may also require continuation
coverage to be offered by smaller employers. You can find out more about COBRA
continuation of group health benefits from the federal Department of Labor,
Office of Employee Benefits Security Administration Web site, www.dol.gov/ebsa/.
HIPAA - The Health Insurance Portability and Accountability Act of 1996 limits
insurers’ power to deny or delay claims, reduces your chances of losing existing
coverage, makes it easier and less risky to switch health plans, and prohibits
insurance discrimination based on health problems. You can find out more about
HIPAA from the Centers for Medicare & Medicaid Services site,
Some Final Tips on Buying Health Insurance
Make sure you feel confident in the insurance agent and company. It is a good
idea to contact your state insurance department and make sure the agent and the
company you are dealing with are licensed in your state.
Learn what kinds of policies will provide what you need and pick the one best
for you. Don’t hesitate to shop around and ask a lot of questions.
Do not sign an application until you review it carefully to be sure the answers
are complete and accurate. Make sure that the word “insurance” is actually used
and that there is no disclaimer stating that, “This product is not insurance,
nor is it intended to replace insurance.”
If you have questions about companies or policies in Florida, contact the
Department of Financial Services' consumer service helpline at 1-877-MyFLCFO.
You may also logon to
www.MyFloridaCFO.com/ for more information.