There are a a number of factors that effect the rates you pay for health insurance including your age, health, marital status, your height and weight, preexisting conditions at the time of application and the type of plan you choose, to name just a few. Some basic principles apply when setting medical insurance rates, most are based on risk, though insurers place more or less emphasis on each factor depending on underwriting guidelines.
Healthier people pay less for health insurance, as you might imagine, as do married couples and those who are height/weight proportionate. Non smokers and those with low risk occupations also pay less. But it’s more complicated than that. The type of medical plan you choose is a huge factor that has an effect on what you pay. The plan you choose should be based on both what you can afford, and what kind of plan best fits your needs.
Indemnity Plan
An Indemnity Care Plan allows you to choose any doctor you want and to see specialists without getting approval from a “primary care physician” .You have the freedom to choose when and where to seek medical assistance. Traditional health insurance is generally more expensive than other types of health plans and may require more paperwork to file claims. Many people don’t mind the higher cost in exchange for the greater freedom this type of plan offers.
Managed Care Plans - PPO vs HMO
PPO (Preferred Provider Organization)
PPOs more flexible than HMO’s but less flexible than traditional health insurance plans . You can choose the doctor you want to see (including a specialist), but if the physician you choose is not a “preferred provider”, your co-payment will be higher. With a PPO you will almost always need to get their approval before entering a hospital. They are however, more likely to cover checkups and other preventive medical services than traditional health insurance plans.
HMO ( Health Maintenance Organization )
Most of the several types of HMOs will require you go to a health care provider within their organization in order for the expenses to be covered. Most will require that you choose a primary care physician who will coordinate your care. More than likely to see a specialist, you’ll have to get approval from your primary care physician. You must get approval from the HMO before entering a hospital or receiving some other kinds of non-emergency care. HMO’s are quite restrictive but also the least expensive.
Bottom line: your insurance company takes all these factors into consideration when setting health insurance rates. So choose your plan carefully and take charge of the factors within your control to help keep premium rates low.
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