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How to Choose a Health Insurance Plan

By Maryalene LaPonsie on April 12th, 2010
Health Insurance

If you are one of the millions of Americans searching for affordable health insurance, you may be confused by the many insurance choices available. So many health insurance companies offer different options and each one claims to be your best choice.

With such a wide selection, how do you know which companies offer good coverage? Fortunately, there are a number of different methods to evaluate health insurance companies and their claims. Keep reading and learn how to navigate the maze of health insurance plans.

Visit the National Committee for Quality Assurance

When reviewing health plans, your first stop should be the National Committee for Quality Assurance (NCQA). The NCQA is a non-profit organization that was founded in 1990 to improve the quality of health care. Through a rigorous evaluation and analysis process, the NCQA accredits health plans on the basis of more than 60 standards.

Although accreditation by the NCQA is voluntary, the organization is well-respected in the medical community and most health insurance companies participate in the accreditation process. For consumers, the NCQA accreditation scoring is available through company report cards.

The online report cards score health maintenance organizations (HMO), preferred provider organizations (PPO), as well as Medicare and Medicaid plans in the following categories:

  • Access and Service
  • Qualified Providers
  • Staying Healthy
  • Getting Better
  • Living With Illness

The NCQA also releases an annual report of the best health plans in the United States, and gives special recognitions to health care professionals who demonstrate exceptional service.

Evaluate Health Insurance Plans through the URAC

The NCQA is not the only accreditation organization available for health insurance companies. The URAC has been accrediting health care organizations for almost 15 years. As an independent, non-profit organization, it claims to be one of the fastest growing accreditation agencies in the world and maintains 16 accreditation and certification programs.

For consumers, URAC does not provide the same easy to read report cards as the NCQA, but it does have an online accreditation directory. This searchable directory includes such modules as case management, disease management and claims processing. When reviewing health insurance quotes, remember that accreditation is a proven measure of the quality of service provided by a health plan.

Find Out Whether a Health Plan Makes the Grade

In addition to the accreditation process through independent organizations such as NCQA and URAC, many states offer insurance company ratings.

For example, California uses a four-star system to rate whether an HMO, PPO or other plan meets national standards of care. Oklahoma relies on a third party evaluator, A.M. Best Company, to provide information on insurers. Georgia uses measures such as customer satisfaction and timeliness of care, to rank HMO plans in its state.

Not all states provide health plan ratings, so check with your state insurance department to find out if this service is offered.

Make Sure the Health Plan is Healthy

This is perhaps the most overlooked aspect when consumers review health insurance quotes. The cheapest family health insurance with the most extensive coverage isn't going to do you much good if the company goes out of business. Make sure you select affordable health insurance from a business that will be around to pay your claim when the time comes. Otherwise, not only will you be left holding the hospital bill, but you'll have lost your premium payments as well.

There are two third-party evaluators that can provide information on a health plan's stability: A.M. Best Company and Standard & Poor's both rate a variety of businesses and organizations on their financial health. While you must complete a free online registration to view Standard & Poor's ratings, those at A.M. Best are available to the public through the company's online Consumer Insurance Center.

Compare Prices for Affordable Health Insurance

Not only should you request a health insurance quote from several companies, but you should also make sure that those quotes are in line with the average premium rates for your state and region. Many states offer information that allows you to compare premiums for HMO and PPO health plans.

In addition, some states regulate the price of certain insurance products through the use of rate bands. These bands stipulate how much health insurance premiums can vary based on your age and health condition. Again, check with your state's insurance department for more information on premium averages and rate bands to ensure that you are getting the cheapest health insurance.

Pay Attention to Unhappy Customers

Almost all states maintain a complaint process for individuals unhappy with their HMOs or PPOs. In addition, those states generally make complaint information available on state insurance department Web sites. A bad ranking in consumer complaints should be a warning sign that a health plan may not be for you.

Shopping for health insurance plans doesn't have to be difficult or confusing. With the right information, you can feel confident that the health insurance company you pick offers quality care at the right price.

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