How Do Health Insurance Plans Differ?

Health insurance plans can differ in terms of their coverage of consumers and services, their costs to the consumers (and consumers’ dependents or employers, if relevant), special features, and generosity, among other properties.

By Coverage
Covered Individuals
The consumer may buy a health insurance plan covering one person, a family, or other groupings. Under self-only coverage, the consumer is the only person insured. Family coverage applies to the consumer and any spouse and/or dependents. Other possibilities include self plus one and self plus children.

If their parent’s health insurance plan covers children, children can be added to their parent’s plan until they turn 26 years of age. Those children under the age of 26 can join or remain on their parent’s plan even if they are married, not living with a parent, attending school, not financially dependent on a parent, or eligible to enroll in their own employer’s plan.

Many consumers with ESI obtain and renew their employer’s plan during open enrollment season. During open season, consumers can change health insurance policies. Outside of open season, consumers cannot change their health insurance plan unless they experience a qualifying life event. Qualifying life events include marriage, moving to a new state, divorce, and childbirth. Open season in the exchanges is similar to open season in ESI.

Covered Services
A consumer might use a variety of health care services over the course of the year. Office visits to a health care provider may include routine well-adult exams, nonroutine flu care, and urgent treatment for bone breaks. The consumer might require X-rays and laboratory tests at some visits. More serious matters may require treatment at a hospital. Some consumers may need medical equipment, others may need a recovery program for substance abuse, and still others may find a single prescription treatment sufficient.

Given the breadth of possible health care, a consumer probably will not find a health insurance plan that covers all possible care. For example, almost no policies cover health care that is not deemed medically necessary by the insurer. Medically necessary care is “needed to prevent, diagnose or treat an illness, injury, condition, disease or its symptoms and that meet accepted standards of medicine. For example, reconstructive breast surgery following a mastectomy performed as part of breast cancer treatment is medically necessary (as well as required by law).In addition, health insurance generally covers breast augmentation to correct a congenital defect in breast development. However, it generally does not cover breast augmentation for cosmetic purposes. Not all insurers consider the same medical goods and services to be medically necessary.