Ins and Outs and others of health insurance
Insurance is a confusing topic, especially when we come to deciphering the ridiculously long medical jargon. This article is here to help you do just that.
I've compiled some of the most commonly used words in health insurance, along with their definitions and an example usage by quoting some real policies from Health Insurance Marketplace. Remember these key terms for next time you're shopping for health insurance!
Premium: A fee you pay in return for getting health coverage. The amount of your premium depends on where you live, how old you are, your marital status, and whether or not you smoke cigarettes as well as other factors.
Co-pay: A fixed dollar amount (e.g. $20) that you pay for covered medical services. When you choose a plan, most plans will include rules that may limit or forbid certain procedures and treatments in order to keep costs down.
Out-of-pocket maximum: This amount is the most you will likely have to pay out of your own pocket for covered health care expenses during a specified period of time (e.g., 12 months). This figure may also include payments by insurance companies for certain services and items if they've paid more than the out-of-pocket maximum for those services and items in a given period of time.
In-network: When a doctor or other healthcare provider is in the network of the health insurance company.
Out-of-network: When a doctor or other healthcare provider is not in the network of the health insurance company, you will have to pay more out-of-pocket costs for covered services from an out-of-network provider.
Preferred Provider Organization (PPO): A type of insurance plan where you are required to use a group of doctors and hospitals that takes care of your medical needs at a lower cost than if you used doctors and hospitals outside of your network. PPOs can have additional benefits, such as a higher annual maximum out-of-pocket amount or more frequent coverage renewals.
Health Maintenance Organization (HMO): A type of insurance plan which pays a fixed amount for all covered health care services from a network of doctors and hospitals. A typical HMO will require that you see out-of-network providers at higher costs than some other types of plans.
Point-of-service: The option that enables you to choose any doctor or other healthcare provider who is in the network of your health insurance company. You can enroll in this type of plan if you do not have a preferred provider organization (PPO) plan or if you are self-employed and cannot get coverage through your employer.
In and Out of Network (slightly more advanced):
To fully understand the ins and outs of in and out of network care you must have a good grasp on what is meant by a healthcare provider. A healthcare provider is defined as any person or institution that provides medical care. Doctors, hospitals, clinics, pharmacies, etc. are all considered providers of medical care. Now that we know what providers are, we can examine the idea behind in network and out of network care.
In-network providers agree to contractually accept rates that have been negotiated between your insurer and provider. Your insurer agrees to pay the provider's contracted amount for covered services. Out-of-network providers are not covered by the insurance agreement.
You can enroll in an in-network plan, but you may be required to use out of network providers for certain services or procedures. You should be able to obtain these services from an out-of-network provider; however, the costs will be higher than if you were treated by an in-network provider.
You will typically only be able to get care from providers that are in your plan's network. If you need care from a non-covered hospital or doctor, you may need to pay a higher percentage of the bill as coinsurance (20%, 25%, or 30%). You will also pay more out-of-pockets for these services as well.
A "preferred provider organization" or PPO plan is a form of insurance that combines the in network (lowest cost) health care benefits of both a traditional HMO and an indemnity plan. You will have a private health insurer with a primary care physician and a network of approved specialists to cover all your healthcare needs.
A "health maintenance organization" or HMO does not usually include many different practitioners in its network, but covers basic services at lower reimbursements than an indemnity plan. This type of plan is like Medicare, in that it requires you to see your primary care physician at least once every year to renew your HMO coverage.
The provider network of an HMO or PPO can be considered an "open panel" or "closed panel." The open panel allows you to see an out of network provider if you do not have a primary care physician, or if your primary care physician is not available. The closed panel only allows for in-network providers.
A Health Maintenance Organization (HMO) is a type of health insurance plan that requires you to receive your care from a network of doctors, specialists, and hospitals. It was developed in the 1960s and 1970s as part of health insurance reform.
The biggest advantage of an HMO is that it can lower healthcare costs for the insurer. This saves money, and also may bring down rates for all policyholders. The biggest disadvantage to an HMO is that it ties you to a certain group of providers, who you must stay with if you want to keep your insurance coverage.
A Preferred Provider Organization (PPO) is another form of managed care that although popular in the 1960s and 1970s, has faded in popularity for the same reasons as HMOs. The biggest advantage of a PPO is that it allows you access to out-of-network providers, at a higher cost than if you used an in-network provider though. It may also give you a higher annual maximum out-of-pocket amount.
Although insurance is often confused with healthcare, the two are not the same. Health insurance protects you from financial losses caused by an unexpected illness. Healthcare, on the other hand, refers to care provided by a health care provider. When you ask your doctor whether something is covered by your insurance and what is not, it is often helpful for them to know what kind of coverage you have so that they can provide the most current and relevant medical advice possible.
Happy Hacking!
References: http://www.aihwpublishing.com/hmo-differences-insurance-nhs/ http://www.healthcaremagicblog.
Conclusion: We have only touched on the tip of the iceberg so far as healthcare and insurance go, but I hope by this point you have a better idea of what to look for when choosing your plan. _________________________________________________________________________________________________
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