Health Insurance-Now You See It, Now You Don't

This is the sixth of the seven steps to accumulate wealth. Health insurance is becoming more elusive with each passing year. You are lucky if your employer offers health insurance. You are even luckier if your employer pays toward your health insurance.

Enjoy it while you can, because I feel the future is bleak for Americans to continue to afford health insurance. Have you noticed that your monthly premium increases each and every year and your co-pays continue to rise or that you now have a co-pay as well as coinsurance?

So, when your health benefits are changing, how do you prepare for the future?

First you have to learn the language. You need to know the differences between an HMO and a PPO. You need to know about indemnity plans and health savings accounts.

An HMO, or health maintenance organization, provides managed care by contracting with doctors and hospitals for a reduced price for services rendered. An HMO has a ''gatekeeper.'' This is usually your PCP, or primary care physician. Your PCP acts like a quarterback. The HMO hopes the PCP will direct your care and also provide you with as much care as possible before referring you to a specialist. The PCP must authorize all care. Emergency room visits may be an exception.

A PPO, or preferred provider organization, offers another form of managed care. Doctors and hospitals contract with the PPO and in turn will provide services at a reduced fee. When you have a PPO as your plan, you will be directed to a network of physicians who participate (known as participating providers) with your specific insurer. You usually have a co-pay, and in some instances you have a co-pay and coinsurance. The difference between this type of insurance (PPO) and HMO coverage is that many PPOs allow you to see out-of-network doctors. The disadvantage of the PPO coverage is that you most likely will have to pay much more to see an out-of-network doctor. This is how you are penalized.

Indemnity plans are traditional insurance plans and are becoming less and less utilized each year due to the high cost of maintaining this type of insurance. Indemnity plans are your typical 70/30 or 80/20 coverage with a deductible. Once you meet your deductible (a specific monetary amount that you must pay before the insurer will pay for care), your insurance company will pay the contracted amount. For example, let's say you have a deductible of $500.00 and 80/20 coverage. You have a procedure at the hospital, which cost $1,000.00. After you pay the hospital $500.00 (your deductible), your insurance company will pay the remaining cost of $500.00 at 80 percent ($400.00) and you are responsible for 20 percent ($100.00).

What's on the horizon? There is a specific health insurance plan that is growing each year: the HSA, or health savings account. This is a tax-advantaged medical savings account, but it must be linked with a high-deductible health plan. The benefit aside from the tax advantages is the ability to spend your medical dollars where you want as opposed to being directed by your insurance plan.

An HSA is different from your flex medical savings account in that the money you contribute to your HSA can be rolled over each year and grow tax deferred but your flex medical account contributions cannot. I recommend sitting down with a health insurance broker or human resources representative at work to learn more about the specific benefits these plans offer.

Now that you know some of the language, what is the next step? You have to figure out your needs. Are you healthy? Are you single with children or married with children? What is the health of your spouse? Are you currently taking mediation? Are you young or old? These are all important considerations.

I have always recommended that my patients with children pay for the best health insurance they can afford. HMO doctors who play ''gatekeeper'' sometimes hesitate when there is a consideration of ordering special tests. I don't know about you, but I do not like gambling with my child's life. I don't want to play the game of ''Let's just wait and see how little Johnny does before we send him off for expensive tests.'' Does this happen all the time? No. But does it happen? Yes. If you have no choice but to participate in an HMO, you should save money from your paycheck each week in a separate envelope earmarked for ''health insurance needs'' in case you want a special test for your child or you want your child to see a doctor who is not part of your HMO. If you can't save each week, get a credit card. This credit card should be placed in your safety deposit box at the bank. Out of sight, out of mind. This is an emergency credit card.

If you are between the ages of 20 and 40, single or married and not taking any medication, then an HMO or a PPO might be a good choice. As you get older, you will more likely than not begin taking some form of medication. When choosing health insurance plans, carefully evaluate any drug benefits provision and its costs relative to medication coverage.

Having insurance is hedging your bet. You are hoping nothing happens to you, but if something does, you have some form of coverage. As you budget to pay your mortgage/rent and car payments and for groceries, fuel, etc., you should also budget for health-related issues, even if you have coverage.

The best coverage is staying well and leading a wellness lifestyle. A wellness, or healthful, lifestyle involves proper nutrition and hydration (water intake), exercise, stress management, vitamins/supplements and adequate sleep.

Our health is our most precious gift. There is a famous Arabian proverb that says, ''He who has health has hope, and he who has hope has everything.''

Here's to your Health, Wealth & Happiness

Dr. Michael J. Kaye has been a practicing Chiropractor over the last 18 years. He holds a post-graduate degree in Rehabilitation. His practice focuses on treatment for the chronic and post-surgical patient. He has published articles on post-surgical knee rehabilitation; and chronic myofascial pain syndrome. He has developed a web site www.frompaintopersonalgain.com devoted to health, wealth and happiness. His coaching site is www.coachinggps.com Contact the author, Michael Kaye , at mijokye@comcast.net