Knowing The Basics

There are four basic elements to a health plan that you should know when comparing plans:

1. Major Medical - This part of the health plan is used to determine your total risk. The total risk or maximum out of pocket is your deductible plus your coinsurance per calendar year. The level of risk can vary greatly. Some plans have a max out of pocket of $1,000; others can be as high as $15,000. Consumers must determine their level of risk before selecting a plan.

2. Prescription (Rx) - Most plans include prescription coverage. A plan may cover medications on a co-pay or coinsurance basis. Rx care may easily be the most expensive part of a consumer's health plan. Costs of medications are continually on the rise and need to be considered when choosing a health plan. It is highly recommended to include some form of basic coverage. After major health conditions, consumers are likely to need medications for a period of time, if not indefinitely.

3. Doctor Office Visits - A visit at a physician's office can often range from $45 to $300. Many health plans offer a Doctor's office co-pay (DOC). This is used to help offset the cost of the visit by the consumer. The insured is usually required to use a physician on their health plan network. The premiums are higher with plans with DOCs. One thing to consider is the frequency you use a doctor. A rule of thumb for this concept is if you visit a doctor three or fewer times a year, a consumer may want to keep the savings in premium and opt not to have a DOC on their plan.

4. Accident Coverage - Accidents are the unforeseen events that even the healthiest of people may experience. In 2004, 33.2 million people - about 1 out of 9 - sought medical attention for an injury. Some plans include a small amount of accident coverage in terms of waiving the deductible or paying the small amount first before the insured. It is recommend to add a supplemental accident policy to most plans to help lower the total risk in the case of an accident.