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What type of plan creates the best value?
Most people start their search for Health Insurance coverage from the viewpoint of Premium cost, assuming that finding the lowest cost plan is the smartest thing to do. As discussed elsewhere on this site, you generally get what you pay for when it comes to the basic three Cs of health care plans [See CCC]. The graphic below was developed by surveying the average premium cost for each of the types listed. The lowest expensive plan is listed at the top and the most expensive at the bottom. Rhe table includes an assessment of the most common cost control provisions used by virtually all Health Care Plan providers. These "cost control" measures are as follows (you should familiarize yourself with these terms):
As was stated in the Premium Cost vs Financial Exposure discussion on this site, the expensive plans generally pay the least on a medical claim and thus expose you to the greatest financial risk. Conversely, the highest priced plans typically provide the most coverage and the greatest financial protection. The graphic below lists the basic plan types by the relative cost of premiums and indicates the amount of the deductible, co-pay, coinsurance, and maximum Out-of-Pocket provisions you are likely to incur by choosing such a plan. The basic plan types surveyed included Indemnity, POS, PPO, and three variations of HMO plans (HMOcp, HMOn, and HMOrn).
As indicated by the above graphic, assuming one type of plan better suits you needs than another or is less expensive than another can be misleading. It is helps to understand how health care plans have evolved today. The specific coverage details of each plan type are very important as they affect your control over the medical care available and determine you ability to access the quality of care desired. Note that all of the above plan types offer versions that make them compatible with what is called Consumer Driven Health Plans (CDHP) such as FSA, HSA, HRA, and HIA. Decide on which of the above options best suit your budget and offers the control and access to quality of care that you need and then ask if a similar HSA, HIA, and etc. version is available. For further details on the advantages and disadvantages of Consumer Driven Health plans see FSA, HSA, and HRA Plans.
The graphic below highlights the plans most people choose when getting the best "value" is their main priority.
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