There are three main categories of health insurance plans:
Health Maintenance Organization (HMO)
Preferred Provider Organization (PPO)
Health Maintenance Organization (HMO)
Preferred Provider Organization (PPO)
Exclusive Provider Organization (EPO)
PPOs, followed by HMOs, are the most common type of coverage. So how do they differ?
Under an HMO, you first choose a Primary Care Physician (PCP). This PCP is your home base, so to speak. He or she will need to refer you to any specialists you may need within a network of pre-selected providers. So, let's say you have been having terrible foot pain. You'd first see your PCP, who would refer you to a podiatrist within the network. These network providers, i.e. doctors who have opted to participate in the specific plan, are the often the only ones your insurance will cover visits to. Usually, visits to out-of-network providers will not be covered.
PPOs give you a bit more flexibility in that you don't have to go through your PCP and you are welcome to visit service providers outside of your network. However, out-of-network providers will be at a higher cost, such that you will pay more out-of-pocket if you choose to go outside of your network (hence the origin of the "preferred" part of preferred provider organization). Additionally, you will likely have to pay a deductible during your visit.
Okay, let's pause here and go over the vocab of what consumers pay out-of-pocket. I just mentioned a deductible. This is the amount you pay yourself before your insurance coverage. Once you've paid 100% of your deductible, your insurance plan will cover the rest. In the case of a PPO, seeing an out-of-network provider means you will have to pay a higher deductible.
This premium is your periodic payment into the health insurance plan. Generally, your premium and deductible are inversely related: a higher premium means a lower deductible, and vice versa.
In addition to the deductible and premium there is also a copay. This is the flat rate amount you pay during doctors visit or for prescriptions. For example, on my plan, when I go in for my annual physical, I pay $10 copay during my visit.
Last but certainly not least, there is the coinsurance payment. This is the amount you pay after your copay and deductible and after the insurance company has paid their portion. If my coinsurance is 20% of remaining fees after the deductible, I pay the 20% of the bill that is left once my deductible is paid and my insurance pays their 80%.
Okay, let's move on to EPOs.
EPOs are like PPOs in that you usually don't need a PCP referral, but similarly to HMOs, out-of-network providers are not covered, unless in cases of emergencies.
HMOs, PPOs, and EPOs are only the most common plans, not the only ones available, and the details of each vary a bit based on your specific insurance provider. What works best for you complete depends on what is available through your employer, what you personally can afford, or your personal necessities. If you are rarely sick or injured, a plan with a low premium and high deductibles may work better for you. If you're really into extreme sports and breaking bones, you should probably look into a higher premium that gives you a lower deductible.
Hopefully, this post has given you a little better understanding of health insurance jargon and the most popular plans available. However, if you're picking a new plan, it is still up to you to research what specific plans are out there (and available to you) and to decide what works best for you.
Alright, that's enough for now. Go get back to your families, enjoy your holidays, and check back in next Sunday for a new post!
Have a healthcare question you want answered? A topic you want addressed? Email whatthehealthnow@gmail.com!
Under an HMO, you first choose a Primary Care Physician (PCP). This PCP is your home base, so to speak. He or she will need to refer you to any specialists you may need within a network of pre-selected providers. So, let's say you have been having terrible foot pain. You'd first see your PCP, who would refer you to a podiatrist within the network. These network providers, i.e. doctors who have opted to participate in the specific plan, are the often the only ones your insurance will cover visits to. Usually, visits to out-of-network providers will not be covered.
PPOs give you a bit more flexibility in that you don't have to go through your PCP and you are welcome to visit service providers outside of your network. However, out-of-network providers will be at a higher cost, such that you will pay more out-of-pocket if you choose to go outside of your network (hence the origin of the "preferred" part of preferred provider organization). Additionally, you will likely have to pay a deductible during your visit.
Okay, let's pause here and go over the vocab of what consumers pay out-of-pocket. I just mentioned a deductible. This is the amount you pay yourself before your insurance coverage. Once you've paid 100% of your deductible, your insurance plan will cover the rest. In the case of a PPO, seeing an out-of-network provider means you will have to pay a higher deductible.
This premium is your periodic payment into the health insurance plan. Generally, your premium and deductible are inversely related: a higher premium means a lower deductible, and vice versa.
In addition to the deductible and premium there is also a copay. This is the flat rate amount you pay during doctors visit or for prescriptions. For example, on my plan, when I go in for my annual physical, I pay $10 copay during my visit.
Last but certainly not least, there is the coinsurance payment. This is the amount you pay after your copay and deductible and after the insurance company has paid their portion. If my coinsurance is 20% of remaining fees after the deductible, I pay the 20% of the bill that is left once my deductible is paid and my insurance pays their 80%.
Okay, let's move on to EPOs.
EPOs are like PPOs in that you usually don't need a PCP referral, but similarly to HMOs, out-of-network providers are not covered, unless in cases of emergencies.
HMOs, PPOs, and EPOs are only the most common plans, not the only ones available, and the details of each vary a bit based on your specific insurance provider. What works best for you complete depends on what is available through your employer, what you personally can afford, or your personal necessities. If you are rarely sick or injured, a plan with a low premium and high deductibles may work better for you. If you're really into extreme sports and breaking bones, you should probably look into a higher premium that gives you a lower deductible.
Hopefully, this post has given you a little better understanding of health insurance jargon and the most popular plans available. However, if you're picking a new plan, it is still up to you to research what specific plans are out there (and available to you) and to decide what works best for you.
Alright, that's enough for now. Go get back to your families, enjoy your holidays, and check back in next Sunday for a new post!
Have a healthcare question you want answered? A topic you want addressed? Email whatthehealthnow@gmail.com!
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