Alert
Close

Last chance – give now. Before 2014 ends, help struggling seniors. Donate

HIGHLIGHTS

Open

AARP VETERAN MEMBERSHIP

Military and Veterans Discount

CONTESTS AND SWEEPS

AARP REALPAD

Introducing RealPad by AARP

AUTO BUYING PROGRAM

AARP Auto Buying Program

DRIVER SAFETY

Piggy bank on the road - AARP Driver Safety

Take the new AARP Smart Driver Course!

Download the ipad App

AARP-iPad-ePub-app

KEEP BRAIN ACTIVE!

AARP Games - Play Now!

AARP Books

Medicare for Dummies book cover

Get the answers you need, from Patricia Barry, AARP's Ask Ms. Medicare

Most Popular

Viewed

share your Thoughts

Reader stories help us fine-tune our education efforts and strengthen our calls for action on issues that matter most to you. We read and learn from every story and may use yours (with permission) to brief legislators, inspire other readers and more. Please share your story with us. Do

Finding Your Way: What's The Right Health Plan For You?

By learning about the differences between health plans and how they work, you'll make a well-informed decision that best meets your needs.

Whether we're making big or small decisions, American consumers like to have options. This preference also applies to making decisions about health plans.

Having a lot of options about which health plan to choose can be confusing, because plans can be very different. All plans don't pay for the same services or pay the same amount for services. Not all plans include the same doctors, hospitals, and other care providers. On top of that, health plans also vary in what you have to pay out of your pocket. Out-of-pocket costs refer to the amount you pay before the health plan starts to pay for your care or the cost you share with your health plan.

When choosing a health plan, you should also consider the quality of care a plan provides. For the past decade, my agency, the Agency for Healthcare Research and Quality, has collected and reported data from patients on what they think about their health plans. Other groups track how well health plans do on key issues, such as helping patients quit smoking or control their blood pressure. These tools are available to the public and can help you make an informed decision.

Even though we know a lot more today than we did 10 years ago about health plan quality, it's a good idea to learn the basics about how health plans work. This will help you make an informed decision about your coverage—before you or a family member are faced with a medical emergency.

Today, more than half of all Americans who have health insurance are enrolled in a managed care plan. These plans usually cover a wide range of services. Costs are lower when patients use doctors and hospitals that are part of the plan. These are called "in-network providers.”

There are three main types of managed care plans:

Health maintenance organizations, or HMOs.

Many of these plans focus on preventing diseases and staying healthy. If you join an HMO, you usually must receive all your care from network providers, except during a medical emergency. After you enroll, you will need to select a primary care doctor, who will manage your care and work with other health care providers you see.

Preferred provider organizations, or PPOs.

These plans let you choose doctors and hospitals that are outside the network, but you will have to pay more yourself for your care.

Point-of-service organizations, or POS.

A newer type of health plan, POS plans use a primary care doctor to manage your care. They also let you choose doctors and hospitals that are not part of the plan, but you will need to pay more.

Because managed care plans have helped control health care costs, they have become more common than fee-for-service health plans that pay separately each time you get care. Fee-for-service plans let you choose any doctor or hospital you want, and you can switch doctors at any time. These plans cover just a part of your medical bills, and you have more out-of-pocket costs for some services than you would if you chose a managed care plan.

Another type of health plan you may have heard of is called consumer-directed coverage. These plans allow you and your family to have greater control over your health care, including what types of care you receive and how much you spend on services. Some of these, such as health savings accounts, require you to be covered by a plan that makes you pay a lot out of pocket before it starts to pay. Detailed information on these and other types of health plans are available in Questions and Answers About Health Insurance: A Consumer Guide from AHRQ.

Regardless of the type of health plan you are considering, make sure you learn:

  • How much the plan costs.
  • What the plan covers and at what cost.
  • Which doctors, hospitals, and other providers you can use.
  • How you get after-hours and emergency care.
  • What your out-of-pocket costs will be.
  • Which medical conditions are covered and if any limits are put on what the plan will pay.

Choosing the right health plan is a big decision. By knowing more about the differences between plans and how they work, you'll make a well-informed decision that best meets your needs. I'm Dr. Carolyn Clancy, and that's my advice on how to navigate the health care system.

Carolyn Clancy, a general internist and researcher, is an expert in engaging consumers in their health care. She is the director of the U.S. Agency for Healthcare Research and Quality.

Topic Alerts

You can get weekly email alerts on the topics below. Just click “Follow.”

Manage Alerts

Processing

Please wait...

progress bar, please wait

Tell Us WhatYou Think

Please leave your comment below.

Discounts & Benefits

From companies that meet the high standards of service and quality set by AARP.

AARP membership discount Man trying on eyeglasses at optometrists smiling

Members save up to 60% on eye exams and 30% on glasses at LensCrafters.

Grandson (8-9) whispering to grandfather, close-up

Members can save 20% on hearing aids with the AARP® Hearing Care Program provided by HearUSA.

member benefits adt companion

Members save on new installation of a ADT Companion Service® personal emergency response system.

Member Benefits

Join or renew today! AARP members receive exclusive member benefits & affect social change.

Rewards for Good

Your Points Balance:

Learn More

Earn points for completing free online activities designed to enrich your life.

Find more ways to earn points

Redeem your points to save on merchandise, travel, and more.

Find more ways to redeem points