Choosing the Right Medical Plan

Again, it’s time for open enrollment. The medical plan is probably the most important benefit on everyone’s list. Potentially, it can also be the most costly, if the right plan is not selected. Every employee and his family’s health needs, is different, though. Thus, there is no “best medical plan”, only wise decision-making.

One important factor to consider is whether to go with HMO, PPO, or EPO plan. HMOs usually provide more valuable benefits, member services, and the security of predictable copayments. They usually don’t have deductibles, and have low out-of-pocket expense (OPX) limits. However, participants are required to choose a primary care physician (PCP) to coordinate health care, or make referrals to specialists, within the network.

PPO plans give members the flexibility to go to any doctor or hospital, without having to assign a PCP. They can also go to a doctor who doesn’t have a contract (out-of-network) with the carrier, but the highest level of benefits can be received, if an in-network practitioner is selected. On the other hand, PPOs do have deductibles to be met, and higher OPX maximums.

EPOs are hybrids of the HMO and PPO plans. They cover as much as HMOs, and only allow for in-network providers, but do not require a PCPs. Cost-wise, HMO’s and EPOs are generally more expensive than PPOs.

Another point to consider is whether one is willing to pay more during paycheck deductions, and so pay less at the time of service, or vice versa. This is where the deductible and coinsurance come in. A deductible is the amount of money that a member has to pay in a plan year, before the medical plan starts paying for benefits. The coinsurance is the percentage that the medical plan pays for a service, after the deductible is met. A high deductible usually means that a low coinsurance is involved, but is much affordable than a low-deductible and high-coinsurance plan. Although most medical plans have ready-made deductible/coinsurance plans, some companies offer build-your-own plans, which allow participants to customize the above mentioned.

The member must also know what types of services he is likely to avail of. Is the wife pregnant, and needs good maternity coverage? Does he have kids who are involved in sports and may need a more comprehensive coverage? Is someone in the family taking regular maintenance brand medication, or can they opt for generic alternatives, instead? Or is he a single, healthy individual, who just needs a plan with good preventive care coverage?

There’s also carrier preference. If the employee is changing the carrier, it’s always prudent to ask the family physician if he’s accepting that kind of insurance (even if he’s in-network with it), because there are doctors who had difficulty with certain carriers when it comes to payment submissions, and are reluctant in taking in patients who are insured by such. The member may also prefer one carrier over another because of better service, ease of filing claims, and national reputation.

Companies that have web sites set up for annual enrollment or qualified status change events and other benefits, also offer online tools like medical and prescription cost estimators, where the employee can itemize his and his dependents’ health needs, and also be provided with a budgeting feature to assist in the plan selection process.

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