HEALTH INSURANCE SIMPLIFIED


Still Have Questions? Call Our Agent Experts at 770-396-9517

There are five basic types of health insurance. There are also a few variations of the basics, however, if you understand the five, the variations will be easily understood.

First, let’s start with the names of the five types.

* HMO-Health Maintenance Organization
POS-Point of Service
PPO-Preferred Provider Organization
HSA-Health Savings Account

 

All plans have certain things in common. It would be helpful to understand what they are so you can see how they apply to each type of insurance.

  • Deductible-This is the portion of any health charges that you pay before the insurance

    company pays anything (many plans waive the deductible for physician office visits,
    instead using an office visit co-pay). ALL plans have a deductible. It may vary
    from $0 to $10,000, but it’s always included in the plan benefits.

  • Coinsurance- After the deductible is met, you enter into a period of coinsurance. It’s

    just what the name says. Two entities are paying the health costs during the
    coinsurance period. When you see the term 80/60 it means that if you stay in
    network, you pay 20% and the insurance company pays 80% of the charges. Out
    of network, you pay 40% and the insurance company pays 60%. There is normally
    a stop loss of $1000 or more that the insured has to pay. In other words, if your
    plan reads 80/20 through $5000, you would be responsible for 20% of $5000.
    Then the insured’s liability would stop and the insurance company would pay the rest.

    Not all plans have coinsurance. Often, you won’t find coinsurance in an HMO plan,
    and often it won’t be in an H S A eligible plan.

    After the deductible and coinsurance have been met, the insurance company has
    the liability of any other covered health charges during the plan year.


There is one more term you should be familiar with and that is the network.

 

  • NETWORK-A group of providers, doctors, hospitals, labs, etc. that have a

    relationship with the insurance company and have established specific pricing
    for services. This is the way that insurance companies manage their costs.


The next section includes information of each new plan.

  • HMO - An HMO is the broadest type of health coverage available. The

    deductible is often $0 and there may be no coinsurance.

    Normally, an HMO has a co pay for most services. The reason we say this is
    the most comprehensive coverage is that the co pay covers all the service
    that the physician or lab charges. When you go for an office visit, it’s
    all-inclusive. There is normally a co pay and/or deductible and coinsurance if 
    applicable, for a hospital stay or outpatient surgery. HMO’s usually fully cover
    the cost of physicals, where the other plans normally have a limit to what they
    will pay for a physical.

    Advantages-The HMO offers the broader coverage with less out of pocket
    costs during the plan year.

    Disadvantages-Primarily less choice in doctors and hospitals. Sometimes the
    doctors in an HMO will be employees of the HMO and not in private practice.
    Treatment is often in a clinical environment in that instance.

    NOTE: Many companies now offer Open Access HMO Plans, which offer the
    advantages of the HMO plan, but with the option to go to a specialist without
    having to get a referral from your Primary Care Physician.

    For More Details About HMO Plans, Click Here.

     

  • POS - A POS plan is simply an HMO that also includes an indemnity plan that allows

    you to go out of network if you choose. All the info on the HMO applies to
    the POS plus the benefits of out of network treatment with the indemnity plan
    (see below).

    NOTE: Many companies now offer Open Access POS Plans, which offer the
    advantages of the HMO plan, but with the option to go to a specialist without
    having to get a referral from your Primary Care Physician.

    For More Details About POS Plans, Click Here.

     

  • PPO - A PPO almost always has a deductible, and coinsurance. If you stay within

    the network, there are also co-pays for certain services where the deductible
    and coinsurance do not come into play. For example, an office visit might be a
    $15-$40 co pay without regard to a deductible of coinsurance. For a hospital
    stay, you would be responsible for the deductible and your portion of the
    coinsurance. A word of caution, the co-pays are often not all inclusive. For
    example, an office visit co pay may mean just covers the physician’s portion of
    the visit. Any lab or x-ray charges, might go towards your deductible and you
    would have to pay the charges.

    There is always an indemnity plan included in the PPO which allows you to see
    any doctor you wish, however the out of pocket charge to you will be greater.

    Advantages-A PPO provides a great deal of choice of doctors and hospitals.
    Because of this, the PPO’s are the most popular plans at this time.

    Disadvantages-Coverage not as comprehensive as an HMO and you would
    experience greater out of pocket expense.

    For More Details About PPO Plans, Click Here.

     

  • H S A - The Health Savings Account, formerly M S A, was established by Congress

    in an effort to make people more responsible for their health care costs.
    Normally, it is some type of indemnity plan with a high deductible. As an
    incentive for a person to manage their health care costs, Congress allowed
    an insured to pay into a special H S A account an amount equal to their chosen
    deductible. This payment would be taken from the insured’s income on a
    before tax basis. The insured would then be allowed to use this account to pay
    for medical and related expenses. The money could even be used to cover
    medical charges not covered by their health plan.

    To further simplify, the H S A comes in two parts. One is a high deductible
    health plan for which you would pay a reduced premium. The second is a
    medical saving account, where you could pay into the account an amount
    annually, up to (approximately) the amount of your deductible. This account is your money.
    If you use the money to pay medical expenses, it is never taxed. If you do
    not use the money in this account, It will remain your money and essentially
    becomes like an IRA. The difference is between an I R A and an H S A is
    the H S A funds can be withdrawn at any time to pay medical expenses
    without penalty. Also, any excess funds must remain in the H S A account
    until age 65 in order to be withdrawn without penalty. Any monies
    withdrawn after age 65 will be subject to regular income tax at the time of
    withdrawal.

    For More Details About HSA Plans, Click Here.

We hope this information is helpful to you. If you would like further information or
have questions, please feel free to contact us at Insurance Now at 770-396-9517 and we will spend whatever time is needed to help you make sure that you select the right plan for you.

Call today for a no-obligation quote! 770-396-9517
 Email: holly@insurance-now.com

Click here to return to the Home Page.

 

 

Print Print | Sitemap
© Insurance Now