You Decide

Celeste Rucker

HSM546

Health Insurance & Managed Care

Cooper-Pearson Sports Marketing

Choose a good plan

Good health insurance protects you from medical expenses you couldn't easily afford on your own. Inadequate insurance is everything else, including some products you can buy that may seem like health insurance but aren't.

What does good insurance look like?

Health insurance should do two things:

•Cover all kinds of medical care. That includes outpatient treatment, doctor visits, hospitalization, prescription drugs, emergency services, mental-health and substance-abuse treatment, laboratory and imaging tests, preventive care, maternity care, and rehabilitation services. You might not need everything now, but sickness and injury can strike at any time.

•Limit your out-of-pocket exposure. Good insurance should pick up 100 percent of your medical expenses when your out-of-pocket expenses from deductibles and co-insurance hit a certain level in a year—say, $5,000 or $10,000.

Resist the temptation to lower your premium by selecting a plan that omits major benefit categories, such as prescription drugs. Instead, lower your premium by opting for a higher deductible (say $5,000 rather than $2,500), a higher out-of-pocket limit (say $15,000 rather than $10,000), or both. That does mean that in years when you're healthy, you might get little or no benefit from your policy. But it's vital protection against financial catastrophe due to high medical bills.

Make sure you understand the plan's details

Starting this fall, all insurance plans (except for Medicare plans) must start providing a standard form, the "Summary of Benefits and Coverage," that sets out critical plan details such as deductibles, co-insurance, co-pays.

Most people in the U.S. are enrolled in some form of "managed care" health insurance—either a preferred provider organization (34 percent), health maintenance organization (31 percent), or a point-of-service (9 percent) plan, which is a hybrid...