Buying Individual Health Insurance – HMO and PPO

If you are considering buying individual health insurance, HMO and PPO are two things that you should research about before shopping around for it. These two have very important differences, but they also provide almost the same services, and both focus on health insurance. HMO and PPO will most likely be terms that you will come across when you look around and are in the market for individual health insurance, and knowing the difference between the two will be useful and will be a great factor in choosing the right type of insurance for you when you hit the market for health insurance.

So what are HMO and PPO? We will start with the former. HMO stands for Health Maintenance Organization. A health maintenance organization will require you to choose a primary health care provider. In other words, you will have to choose which doctor you prefer because that doctor will be the only one you can go to and avail of your health insurance at the same time. This will mostly be determined by your doctor, if you have a specific go-to one, and if they are signed up to an HMO instead of a PPO. HMO is ideal for those who see specialist doctors or general practitioners, as most of them are signed up to an HMO contract.

PPO, on the other hand, if you are considering buying individual health insurance under a PPO, it will cover a wider range of health care provider services. As opposed to HMO, PPO will not restrict you to a primary health care provider. As long as the doctor is signed up to a PPO contract, you can avail of this doctor’s health care services. PPO, or Preferred Provider Organization, also offers a wider range of health care services that HMO might not provide. On top of that, PPO as a third party organization makes health care providers charge at reduced rates to its clients.

HMO generally gets bad press for its restrictive rules and services provided. People buying individual health insurance opt for PPO instead of HMO. But PPO proves to be significantly more expensive despite its reduced rates, as it has a wider range of coverage for their clients. HMO is more for you if you need to see a doctor for only a certain amount of health care services, such as illnesses that are chronic and need regular check-ups and special services. PPO will prove more useful if you anticipate emergencies instead of regular doctor visits, and will offer more flexibility in its coverage than HMO can offer.

In the end, choosing individual insurance would depend solely upon your health care needs. Purchasing individual insurance will guarantee that you never get caught empty handed, but availing of the wrong type would still leave you with that problem, as HMO and PPO are two different contracts and your health care provider might be signed up to either one of these. Buying individual health insurance wisely by doing all the necessary research and knowing what its coverage is will prove to be very useful in cases when you need health care the most.

Are You Buying The Right Health Insurance Plan? Read This

It is rightly said that necessity is the mother of invention. This applies to health insurance also. Deteriorating lifestyle patterns and the rising cost of health care in India has paved way for health insurance services. This need has further aggravated by the fact that unlike the West, the social security systems are non-existent in India. The governments have made all the provisions to extract tax from the citizens at all possible points but when it comes to health care and social security, it has not done anything at all.

Thus, it is the responsibility of the citizen to secure himself. But it is not that smooth to get the right health insurance policy. There are over two dozen general insurance companies which are offering different types of health insurance plans in India. Many times, people end up buying health insurance plans which are not relevant for them and which do not help them during the time of need.

Therefore, it bears crucial significance that you understand the nuances of health insurance plans and then only make a decision. Here is a quick list for you.

What all do health insurance plans cover?

Health insurance plans are primarily meant to provide you coverage against hospitalisation and critical diseases. Most plans cover this. But, there are many plans, which do not cover certain types of health ailments. For instance, you can find several mediclaim plans which do not cover blood pressure and diabetes related issues.

The scope of coverage can be different too. For instance, not every plan covers post-hospitalisation expenses. In some the coverage period can be as large as 45 days and in some the period could be as little as one week.

It is your responsibility to check on these matters. If you are relying on the insurance agent who is pursuing you, it can cost you dear at later dates. Agents are interested in making sales and commission. They may show their concern and tend to offer you the best plans, but they reality can be very different. So, just take care of these aspects.

The development of health insurance industry in India has motivated insurance companies to introduce comprehensive plans. A wide range of riders are also available at your disposal. Thus, if you buy a standard policy, you can add on riders which can provide you cover against many other risks such as permanent disability benefit, diabetes coverage, etc.

Do they cover pre-existing conditions?

Most mediclaim plans in India do not cover pre-existing conditions unless specified. Do not assume on this matter. If you are looking for coverage against a pre-existing medical condition, then clarify it at the very first instance. You can compare health insurance plans online and consult with customer care centre through online chat option or telephonic call.

There are plans which cover pre-existing ailments at certain conditions. Generally, there is a pre-specified period under which pre-existing conditions are covered. The cost of such plans is naturally higher than the standard ones.

Can multiple family members be covered under one plan?

Yes, it is possible. You can simply opt for a family floater plan and get your family members covered under a single plan. There are myriad benefits of these plans. The premium is a bit higher but quite less if you go for different health insurance plans for various family members. The collective cost for various plans is much higher.

Family floater plans, at the other end, are cost effective. The most frequently asked question about family floater plans is what happens if one member consumes the coverage limit and another member falls ill. There are solutions to these conditions.

You can top-up coverage limit during the policy period. Of course, you need to pay some additional premium to get the extended coverage.

Can you switch from one health insurance plan to another?

Portability is not limited to the telecom sector only. The Insurance Regulatory and Development Authority of India (IRDAI) has made portability possible in the health insurance sector.

If, due to any reason whatsoever, you wish to change your health insurance service company, you can file an application for the switch. Health insurance is offered by general insurance companies, so far and they cannot reject your claim for portability.

They can try to retain you but at the end, it is your prerogative to make the final decision. If you come across any issues pertaining to your health insurance plan, you can file a complaint at IRDAI’s online consumer grievance redressal system. It is amazingly efficient and you can expect an action within a 15-45 day period.

Nonetheless, the IRDAI has taken tough measures to protect consumer rights and there are all the possibilities that your grievances are resolved by the insurance company itself at the first stage and you do not need to approach IRDAI in that case.

What about tax exemptions?

In the current fiscal year ending March 2015, you can claim for a tax deduction to the limit of Rs 15,000 towards payment of health insurance premium, under Section 80D of the Income Tax Act. From the next fiscal year, this limit is set at Rs 25,000 a year.

Buying Health Insurance Through a Broker

In its most simple definition, a health insurance broker (also commonly known as an agent) is someone who is licensed to sell health insurance. However, there are many other services they provide you that fall under the umbrella of selling health insurance. Here are some of the most important:

  1. Perhaps the most important fact to know about working with an agent is that it’s free. Insurance agents are paid by insurance carriers, not by consumers. So don’t worry about having to pay some service fee for signing up for a plan with an agent, because it will cost you nothing more than if you were to do it yourself
  2. Health insurance is confusing, and an agent will explain it to you until it makes sense. Ask all the questions you want, that’s what they’re there for. Want to know what your coinsurance will be on a certain plan? Want to know what coinsurance even means? Ask away!
  3. An agent can help you compare plans that you’re interested in. When you let an agent know what it is you’re looking for, they will narrow down your possibilities and explain the benefits of each. They can check to see if your doctors and preferred medical facilities are in-network, and they can just to see if any prescriptions you take are covered (and how much).
  4. Your agent is your agent as long as you have your policy. This means that you have someone you can contact when you have questions or even when you want to shop around for a new plan. You’ve got someone in your corner, as opposed to just winging it and picking out a plan on your own.

Because I’m sure you don’t want to be here reading all day, those are only a few of the biggest benefits of using a licensed agent to buy health insurance. That’s not even including how much time and frustration an agent can save you (we’ll save that for another article!).

To make it even more convenient for you, many brokers have the ability to access plans that are both on and off-exchange (government-run Marketplaces for health insurance). This provides you with even more options. Additionally, for agents who can access on-exchange plans, they can also determine your subsidy eligibility that can lower your premium and out-of-pocket expenses. Again, saving you yet another headache.

The next time you need to enroll in or change a health plan, keep a licensed agent in mind- it won’t cost you anything, but it will certainly save you a lot.