Understanding Your Coverage

It’s easy to find yourself confused by the medical insurance jargon you may encounter when trying to choose a health insurance plan. Familiarize yourself with the basics to help you find the one that best meets your needs.

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HMOs vs PPOs

A Health Maintenance Organization (HMO) is a type of managed care health plan where members choose their physician from a list of approved health care providers, which typically results in lower premiums and/or copayments. Generally, members of an HMO can only see a health care specialist (obstetrician, cardiologist, rheumatologist) if they get a referral from their primary care physician, HMOs tend to provide the least expensive medical coverage and a minimum amount of paper work. However, your choice of physicians may be more limited.

A Preferred Provider Organization (PPO) is a managed care health plan that gives its members multiple choices in health care and health care providers. You or your employer pays a monthly or quarterly premium for coverage of a broad range of medical services. Like an HMO, a PPO may charge a copayment for each office visit and there is usually no paperwork to complete. The network of physicians is often much larger than an HMO and members can refer themselves to physicians outside of the network, although you may pay a higher copayment for this service.

Click here to learn more about the difference between HMO and PPO plans.

Health Insurance Premiums

An insurance premium is a set amount that you pay for your health insurance coverage. As a part of an employer-sponsored health plan, your premium is usually deducted from each paycheck. Health insurance premiums vary depending on the insurer, the type of insurance plan (HMO, PPO, POS or FFS), and how much your employer contributes towards your coverage.

Health Insurance Co-Pays

A co-pay or co-payment is the amount you have to pay that is not covered by your health insurance plan. If your plan includes a co-pay, you usually have to pay that amount for services such as doctor's visits, medical tests and treatments, and prescription drugs. The amount of your co-pay can vary by plan. Your co-pay amount is generally listed on your health insurance card.

Out-of-Pocket Expenses


Out-of-pocket costs are those health-care expenses you pay that are not reimbursed by your health insurance company. Some common out-of-pocket costs include your deductible, co-pay, and co-insurance.  Your health plan will "cap" your out-of-pocket expenses, which means that once you reach the maximum out-of-pocket costs for your plan, your health plan takes over and provides coverage.

Generally speaking, your out-of-pocket expenses are applied toward your deductible. After you meet your deductible, you may still pay either a co-pay and/or co-insurance amounts when you receive medical services or prescription drugs. Review your plan documents for specific details on your plan’s out-of-pocket expenses and deductibles.

 

Click here for more information on managing your deductible.

Out-of-Network Services

Out-of-network services are services received from a physician or specialist who is not in your health insurance plan’s network. You will likely have to meet a higher deductible and pay a higher co-pay or co-insurance amount when you see an out-of-network provider. Some plans may not cover out-of-network services at all. Review your plan documents for specific details about out-of-network coverage.

Questions to Ask When Choosing a Plan

Is my doctor in the health plan network? Many health insurance companies establish provider networks. These networks include doctors, hospitals and other health care providers that have contracted with the health plan to provide care at special rates.

What is the most I am at risk to pay for the year? Add up your total expected out-of-pocket costs. This includes your payroll contributions, co-payments for office visits or medications, and your annual deductible. Some insurance companies and employers offer estimator tools to help you determine your costs for the coming year. If you have a choice of plans, think about which payment method is more comfortable for you. For instance, would you be comfortable paying higher premiums and lower deductibles or the other way around?

What does the plan cover? Make sure the plan gives you peace of mind. You will want to know which services are covered if something unexpected happens. Look for preventive care, doctor visits, hospital stays, and emergency room coverage to name a few.

What are the extras that come with the plan and are they free? Spend a few minutes to understand any extras the plan may offer. This can include discount programs, wellness programs, 24-hour nurse support, and programs to manage chronic illnesses. These can add up to better care and lower costs for you.

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