Health Insurance
A BlueCollarDollar Special Section: What do you know about Long-term Care Insurance? Do you know what to ask the agent selling you the policy? If not, here are 18 Questions to ask about Long-Term Care (LTC)

These are incredible times with a wealth of options to help us thrive. But that aside, there is nothing more frightening than going through each day without the protection of some sort of health insurance. It is the kind of peace of mind that millions of Americans live without and in doing so, chance the loss of everything they own.

Health insurance is protection against the high cost of medical care. This type of policy is an absolute necessity in today's world largely because the cost of medical care has climbed to such a level that basic treatment can be out of reach for almost everyone. This risk is very real, and because of this risk, many people live day to day, gambling with their health, and the assets that they have accumulated.

It is more than coverage for major injuries. It is more than coverage for sudden illnesses. It can be preventative as well as curative. Can you really look at your family and determine that their health is not worth investigating what you need to protect them. Health insurance basically covers "things that happen".

It is, however, one of the more complicated insurance you will purchase. Understanding it takes a few minutes but familiarizing yourself with some basic concepts will help you choose a plan that will protect you and your family. it can become a balancing act between coverage and cost.

Let's first break the two types of health insurance plans down. first there is the Indemnity Plan also referred to as the reimbursement plan.

This type of plan allows you to pick who you want to see and reimburses the health care provider for their services. There are usually limits to what will be paid. Some plans pay actual costs which means that whatever the charge, the insurer will pay. (So will you unfortunately...It is like having a zero deductible on your car insurance...no money out of your pocket will cost you more than if you agree to pay a percentage)

This a plan that will reimburse you for visit to health care professional but will only pay a percentage of the cost. Standard plans usually pay the first 80%, with the remaining monies paid by you. The indemnity plan reimburses you for a certain amount for a maximum number of days but will never exceed your out of pocket expenses

The other type of plan is called a managed care plan. You have heard these terms before and often not in the best of terms.

HMO's (Health Mainentance Organizations) PPO's (Preferred Provider Organizations) or POS plans (Point of Service), while being different all have noticeable similarities. they are all based on arrangements with providers of health care such as doctors or hospitals. These types of arrangements can be more cost effective and come with excellent financial reasons for using them.

HMOs are a prepaid arrangement that allows you to receive medical care for a fixed amount each month. You must, however, use the services that are provided in the plan or the HMO network.

PPOs is a healthcare system available to a certain group or association. There is a co-payment but the services are not prepaid as they are in an HMO rather they are paid as you use them. Sometimes you are reimbursed after the co-payment is deducted, sometimes the health care folks are paid, and you then make your portion of the payment

POS plans usually costs very little as long as you use the providers within the organization. Going outside the network will cost you big time.

Which one is best? If you are a freedom of choice kind of person and willing to pay for that freedom, indemnity plans will be best suited for you. Be sure that you set aside a fair sized chunk of change because freedom in this instance will cost you. Managed plans are best suited for the individual who likes the idea of a fixed budgetable cost for their health care needs.