The biggest choice in health insurance today is between managed care and fee-for-service coverage.

Managed care, which includes Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs), requires you to choose healthcare providers that participate in your plan and have agreed to accept a specific fee for their services. You choose a primary care doctor, often called a gatekeeper, who will refer you to specialists if your medical problem is outside his or her sphere of expertise. You pay a small charge, called a copayment, for each visit. The payment usually ranges from $10 to $20.

Fee-for-service medical plans, sometimes known as conventional health insurance, allow you to choose the healthcare providers and specialists you want to use. You pay your medical bills until you reach your deductible, which is a predetermined amount of money, often set around $250 for an individual. After you reach your plan's deductible, your insurance company begins to pick up part of the cost. Generally, you pay the bill first and then submit a claim. Your plan reimburses you a portion--typically 80%--of the amount the plan approves for the particular service you've had.

Catastrophe plans will keep you covered in the event that your medical expenses exceed your cap, or the upper limit on your health insurance policy. Though health insurance caps are often $1 million to $2 million, you could reach that amount if you have a major accident, serious illness, or other unexpected medical needs.

Indemnity plans will pay a benefit amount for every day you spend in the hospital. These plans are most often used as a supplement to a broader health insurance plan, enabling you to cover nonmedical costs of your hospitalization. Indemnity plans usually contain a number of eligibility restrictions, and aren't typically used as your only health insurance.

Buying insurance as an individual means you pay a premium on a fixed schedule, usually monthly or quarterly. You will pay significantly less if you can participate in a group plan offered by your employer or an association that you belong to. Some employers pick up the entire premium for your coverage, while others require you to pay a portion of the cost.

An advantage of receiving group insurance is that you are often able to insure family members under your plan, though you usually have to pay an additional premium for that coverage. But, as part of a group, you may not have the flexibility to choose between joining a managed care or fee-for-service plan. If you are married and your spouse is covered under a separate plan, you usually have the option of choosing the better plan and declining the one with fewer benefits.

If your employer has been paying your health insurance premiums, the cost of COBRA coverage can be surprising. You are responsible for the full premium plus up to 2% in administrative costs. Usually, COBRA will be less than what you'd pay to buy insurance independently --and could save you lots of money in case of an accident or illness. COBRA coverage is also available for your adult children or your former spouse for three years after they are no longer eligible for coverage on a family policy.

If you and your spouse have separate fee-for-service health insurance plans--for example, if you have policies from separate employers--will covering your children under both plans give them double insurance? In some cases, the answer is yes.

If you do choose to cover them under both plans, the insurance companies will designate one plan as the primary plan and the other as the secondary plan. The primary pays a claim first. Then you can submit the bill to the second company, which may provide additional reimbursement up to, but never more than, your total expense.

The spouse with the first birthday of the calendar year, but not necessarily the older spouse, becomes the primary plan holder. For instance, if your birthday is on January 5 and your spouse's birthday is on September 10, you would hold the primary plan.