Health Insurance De-Mystified

Health Insurance De-Mystified

Health Insurance has many terms, phrases and TLA (Three Letter Acronyms) that many outside the industry do not fully comprehend.  This is an attempt to identify the most common terms to reduce the confusion.

Insurance - the exchange of risk, either partial or total; for a premium.  So for example: Health Insurance is the exchange of an individual, family or group's risk (cost of treatment) of sickness and injury; typically for a premium payment.

Premium - 

this is the amount paid to keep your policy in force; usually paid monthly.   Premium is just that, your monthly payment.  Premium payments do not count toward meeting your deductible.

Deductible - this is the amount that the insured must pay before the insurance company begins to share the cost of covered services that are subject to the deductible.   For example: The least expensive plans on the marketplace tend to have the highest deductibles, some as high as $6600.

Co-pays - 

A fixed amount paid by the insured for services not subject to the deductible, or that are subject after the deductible is met; per the policy agreement.  For example:  Some policies state that a Primary Care Physician co-pay is $20; after deductible.  That means, before the deductible; your cost is 100% of the contracted insurance rate for that visit, until you have met your deductible, and then your cost would be $20.

Co-insurance - 

A percentage of the negotiated discount rate paid by the insured for covered services after the deductible is met, but before the Out-of-Pocket Maximum has been achieved, for services that are subject to deductible.  For example, a plan may have a $500 deductible-meaning that the first $500 of services would be the responsibility of the insured; and the policy has a $3000 Out-of-Pocket Maximum; and is 90/10 coinsurance.  That means the insured will pay the first $500 of covered expenses at 100% of the negotiated rate; then move to 10% of the negotiated rate for that service until the insured's 10% equals $2500.  The Out-of-Pocket Maximum less the deductible is the total co-insurance maximum amount.  Once the insured has incurred $3000 of cost in this example, in a calendar year; the insurance company would be responsible for costs above the Out-of-pocket maximum amount at 100%; except for services that are co-pays either before or after the deductible.

In-network- 

Your plan has "in-network" and "out-of-network" providers.   The latter is any provider not in the former.  The highest network discounts (therefore the most cost-effective providers) are found in-network.  You may choose (wittingly or otherwise) to seek services from out-of-network providers, but typically your deductible doubles for services obtained outside of network.  So, in effect you have 2 deductibles - In-network, and Out-of-Network.  Your network is made of several types - HMO, PPO, POS, EPO

HMO-

Health Maintenance Organization networks are usually the most cost efficient, and therefore typically less expensive when compared to the other network types.  In an HMO, your care revolves around your Primary Care Physician (PCP) who oversees your care, and recommends when you see a Specialist; who typically is also a member of the HMO group to which the PCP belongs.   If you decide to see a Specialist without a referral, that will usually be one of the other network types of  specialist (the HMO Specialist will generally refer you back to your PCP to get the referral).

PPO- 

Preferred Provider Organization networks are less structured than an HMO; and you can choose any provider that is within the PPO network; to obtain network discounts.   No need for a referral to see a Specialist, but always ask your PCP who they would see if they had similar symptoms.  Also ask friends, co-workers, nurses, and any other trusted source.  Consult your PPO directory to stay within your network for best cost.

POS-

Point of Service Network; is a type of managed care health insurance plan in the United States. It combines characteristics of the health maintenance organization (HMO) and the preferred provider organization (PPO).The POS is based on a managed care foundation---lower medical costs in exchange for more limited choice. But POS health insurance does differ from other managed care plans. Enrollees in a POS plan are required to choose a primary care physician from within the health care network; this PCP becomes their "point of service". The PCP may make referrals outside the network, but with lesser compensation offered by the patient's health insurance company. For medical visits within the health care network, paperwork is usually completed for the patient. If the patient chooses to go outside the network, it is the patient's responsibility to fill out forms, send bills in for payment, and keep an accurate account of health care receipts.  (Thanks, Wikipedia)

EPO-

Exclusive Provider Organization; In the United States, an exclusive provider organization is a hybrid health insurance plan in which a primary care provider is not necessary, but in which health care providers must be seen within a predetermined network. Out of network care is not provided, and visits require pre-authorization. Doctors are paid as a function of care provided, as opposed to an HMO. In an EPO, the payment scheme is usually fee for service, in contrast to HMOs. In the latter, the healthcare provider is paid by capitation, and receives a monthly fee regardless of whether or not the patient is seen.[1]  (Thanks again, Wikipedia)

Wow...after all of that; I need to take two aspirins.  If you are dizzy from all of that...like I am now; and I work in this industry; you have another choice.  Let me review what you currently have, compare it to what is available both on the marketplace and from USHealth Advisors.  I will de-mystify all of the above, and more (yes, there's even more confusing topics regarding health insurance) and recommend the best option for your situation; and YOU get to make the final choice.   No stress, no pressure, no obligation; just common sense, and dollars and cents.  You need an Advisor; one who has experience both on government and business marketplaces; and otherwise; that is me Ed Simson.  I have the choice to work for any insurance company....I chose USHealth Advisors.
Thanks, contact me at 602-315-0316 or message me thru LinkedIn

Written by

Ed Simson