Open enrollment for health insurance is here. I’m going to go over terms you should know before choosing a health insurance plan.
The first thing to know is the insurance plans with the cheapest premium aren’t always the most cost efficient in the long term. My cheapness, ahem, I mean frugalness, cost me thousands. I don’t want that for you, your friends or your family.
PPO vs HMO vs POS vs EPO
This looks like an algebra equation, right? Anyone else feel a little anxiety when your employer hands you these insurance forms? I use to! When I didn’t know the answer on a test I would chose C. Following that same principle, I would chose insurance plan C (cheapest). Using this principle caused me to get a D; DEBT! So here’s what to know:
PCP-Primary care provider aka Family doctor aka Medical doctor aka General doctor. People call the PCP many things; the thing to remember is it’s the doctor that you see for annual physicals, referrals, medicines, common colds etc.
Deductible-Amount you have to pay before insurance starts to pay your medical bills.
Co-insurance- After your deductible is reached the insurance pays part of the bill. Usually the insurance pays 80%. Leaving you with 20% of the bill to cover. This 20% is your co-insurance or cost share.
Maximum out of pocket- AKA max oop. The most money your will have to pay for the year. Once max oop is reached you pay nothing. The deductible and co-insurance typically count towards the max oop. Premiums do not count towards the max oop. The in network max oop is less than the out of network max oop. Meaning you may meet the max oop for in network providers but still have to pay a co-insurance for out of network provides; until the max oop for out of network is meet. Another way to put is if you meet the in network oop max for the year, any provider in network will not cost you anything for the rest of that year However, if you go to an out of network provider you will still have to pay a co-insurance. I suggest verifying that both in network and out of network providers count towards the same max oop for the year. Or if there is a separate max oop for in network providers and a separate max oop for out of network providers To clarify, say you’ve reached your deductible and you go to an in network doctor. The insurance pays 80% and your portion to pay or co-insurance is $150; the $150 would be applied only to the in network max oop. There would be nothing applied to the out of network max oop. Typically your co-insurance counts toward the max oop no matter if the provider is in network or out of network.
Referral-Certain medical plans require that your PCP write a referral before you can see specialist.
Authorization-After the specialist receives the referral from your PCP, the specialist submits a request for authorization for the services that will be provide. The authorization is like a promise to pay from the insurance to the specialist office.
Preventative screenings- Testing or procedures use to rule out disease. Examples are mammogram, colonoscopy, PAP Smear, prostate screening, and vaccines or shots such as the flu vaccine. Preventative screenings are typically covered 100% by your insurance. These screenings do not count towards deductible, or max oop.
Diagnostic testing- Testing or procedure to check status of illness or disease previously diagnosed and/ or treated. For example, anyone that has had a lump in there breast all mammograms moving forward are considered diagnostic and no longer preventive. This diagnostic testing is NOT covered 100% by insurance.
Side note: if you’ve had cancer anywhere in your body and it is found years later in another part of your body it may be considered reoccurrence. For example, any woman that has had breast cancer, of years later has lung cancer it will be considered breast cancer that has spread to lung. There are medical terms and other details but we’ll dive into the how’s and why’s later.
PPO- Preferred Provider Organization. Plan covers both in and out of network providers. Out of network provides will cost more. Cost include monthly premium, deductible and co-insurance. There is a max oop. The pro of the plan is that a referral is NOT required. You can go see any specialist you want.
HMO- Health Maintenance Organization Plan covers in network providers ONLY. Except in the case of an emergency. Out of network provides will not be covered by insurance and you will pay 100% of cost. There is no monthly premium, no deductible and no co-insurance. Unlike PPO there are pre determined co-pays. Meaning you already know what you will have to pay for your visit. Once you pay your co-pay you have covered you will not receive any other bills. The downside of this plan is the network can be small. Also you may need a referral from your PCP to see any specialist. Even routine specialist like the OB/GYN. Often people do not want to leave their PCP or specialist so they opt for the PPO. The good thing is typically HMO plans work with health care systems like UCLA, Kaiser, Sentara, Bon Secours and MCV. Therefore, if you don’t like the vibe of one provider you can always chose another.
POS-Point of service. PCP is required. The plans covers both in and out of network providers.
EPO- Exclusive provider organization. This plan does not require referrals from your PCP to see a specialist. Network of providers is similar to a HMO. Out of network providers are not covered.
Prescription drug plans- Insurance for prescription medication is a separate entity from medical coverage. Medications have separate deductibles, co-pays and/or co-insurances. A formulary with different with 3-4 tier levels, determine medication costs or if the medications will be covered at all. Please review the medication coverage plans before making a solution. Medication coverage can get so complicated that I will have to save the details for another. Like how to get a medication that’s not on the formulary to be at least partially covered, programs to help with cost of medications (you must qualify) and how to get a tier 2 medications to tier 1 in order to lower your co-pay. It takes effort but I’ve actually done these things for my patients. So we pause for now.
I hope that this info helps you or someone you know to feel a little less anxious when choosing health insurance. I know this isn’t the most exciting information; however, any information that can save me money excites me!
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