Magazine article Black Enterprise

Consumer's Guide to Health Insurance

Magazine article Black Enterprise

Consumer's Guide to Health Insurance

Article excerpt

WITH THE REPUBLICANS FIRMLY in control of Congress, President Clinton's much-vaunted health reform has fizzled. But that doesn't mean the drive for reform has died. Cost-cutting employers are busy trying out new insurance plans, including managed care options that limit your choice of doctors, hospitals and other health care providers. Employers are also requiring employees to pay a substantially larger share of their own premiums.

What does this mean to you? Chances are, you're spending more money on health insurance than ever--and that figure could climb higher. To get your money's worth, look closely at all the plans your employer offers.

You also need to weigh your options against coverage offered by your spouse's employer. Should you and your spouse be on the same plan? And what about the kids? The bottom line, says Patricia Wiley, a senior manager and health insurance expert at Ernst & Young in New York, is that now you, not your company, must choose the best health care plan for your family.

Essentially, the choice is between two types of coverage: traditional indemnity insurance and managed care plans. Indemnity insurance offers a choice of doctors and reimbursement for a preset portion of expenses; managed care plans cost less, but require you to use service providers employed by or contracted to the insurer. Managed care plans cover more than 60% of employees of large- and medium-size companies today.

If you enroll in a managed care plan, you choose a primary care physician, sometimes referred to as a "gatekeeper." He or she coordinates your care and decides what tests, treatments and specialist referrals are appropriate.

The fastest growing form of managed care is the health maintenance organization (HMO), in which you pay a premium and a nominal co-payment ($5 or $10 is common) for office visits and prescriptions. some HMOs own their own facilities and hire their own doctors and service providers. Others, known as independent practice associations (IPAs), contract with doctors, hospitals and labs to supply services at a discount or flat per-patient rate. If you belong to an IPA, you see your doctor in his or her private office rather than at an HMO facility.

Low out-of-pocket costs plus good coverage for well-baby care, immunizations, physical exams and other preventive care make HMOs particularly attractive to families with young children. HMOs are also an attractive option for people with chronic health conditions that require frequent treatment. "Indemnity plans just pay claims when someone gets sick," says Pamela A. Adams, senior vice president for operations and corporate development for HIP Health Plan of Florida Inc., a nonprofit HMO based in Hollywood, Fla. "Managed care emphasizes preventive care and health education."

On the downside, joining a managed care plan may require you to change doctors. More importantly, the quality of HMO service varies widely. With the exception of word-of-mouth reports from co-workers, it's hard to find out how well an HMO works without joining it. "Some HMOs do a great job," says Geraldine Dallek, executive director of the Center for Health Care Rights, a consumer advocacy group in Los Angeles. "The problem is that there's no way for consumers to know. There is practically no information available on quality of care."

For Billy J. Harris, an investigator for Wisconsin's Department of Industry, Labor and Human Relations, the decision to use managed care was fairly easy. Harris chose U-care, a nonprofit HMO affiliated with the University of Wisconsin Hospital. A key reason: His daughter Aja, now 13, was being treated for a chronic respiratory condition by doctors at the hospital.

Though Harris chose his plan based on the areas it covered, many employers use financial incentives to steer employees to HMOs. As long as Harris stays in the network, virtually all his health care costs are covered. And the state pays all the premiums. …

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