Style of Health Insurance Plan
The style of a health insurance plan is the first decision you'll likely be making. Are you looking for insurance to supplement another plan or to provide bare bones coverage for a short time? Do you need full and comprehensive medical coverage to protect every angle of your child's health. For most families, a PPO will be the plan most suited to their needs with the majority of medical criteria included. But even within the multitudes of PPO plans, you'll need to make decisions before you can narrow down your options further.
Deductibles
All PPO plans have a deductible. The deductible is the amount you must pay out of pocket in medical bills before the insurance kicks in. most often there is a deductible set for each individual in a family plan and then a family deductible. The family deductible is usually two individual deductibles combined, and when the family deductible is met, there are no additional deductible payments for any of the other insured family members. The deductible renews every calendar year.
Deductibles usually occur in increments of $1000, $1500, $2000, $3000, $5000 and $10,000. A low deductible will mean a higher monthly payment, but if you spend a lot of time at the doctor's office, it will give you peace of mind and save you money in the long run. If your family is relatively healthy and sees the doctor only for basic appointments, a higher deductible might be more suitable.
Maximum Out of Pocket
When you use a PPO plan, you'll be paying all of the bills up to your deductible, and then 20% (or your plan's percentage) after that. If your son has a broken leg and has $3200 in medical bills, you'll pay your $1500 deductible, and then 20% of the remaining $1700, or $340 for a total cash outlay of $1840. If he falls and breaks the other leg next week, you'll only pay 20% of the bills as your deductible as been met.
For the rest of the calendar year you'll continue to pay the 20% until you reach your maximum out of pocket amount. This is a cap on your portion of the medical bills. The amount varies, usually in tune with your deductible. The higher the amount, the lower your monthly payment, but you'll be out more cash should you be faced with emergency room visits or hospital stays.
Co-Pay and Coverage
Another major consideration for families is how much is covered with a waived deductible. For example, there might be five appointments per year allowed per family member over three without having to meet the deductible. You'll only be required to pay a co-payment at the time of the visit. The amount of the co-pay can vary greatly, so it should be considered as well.
If you have a young child, different plans cover different numbers of well-baby visits, so be sure to plan ahead accordingly and choose a co-payment you can live with since you'll be at the doctor at least every 2-4 months for the first year of life. Co-pays can be a set amount such as $20, or they can be a percentage of the visit total.
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