Health Insurance Basics: Part 2

Health Insurance Basics: Part 2

Does a Health Plan Typically Pay for Services from Any Doctor?

Not always. Some types of plans encourage or require consumers to get care from a specific set of doctors, hospitals, pharmacies, and other medical service providers who have entered into contracts with the plan to provide items and services at a negotiated rate. The providers in this designated set or network of providers are called “in-network” providers.

  • In-Network Provider: A provider who has a contract with a plan to provide health care items and services at a negotiated (or discounted) rate to consumers enrolled in the plan. Consumers will generally pay less if they see a provider in the network. These providers may also be called “preferred providers” or “participating providers.”
  • Out-of-Network Provider: A provider who doesn’t have a contract with a plan to provide health care items and services. If a plan covers outof-network services, the consumer usually pays more to see an out-of-network provider than an in-network provider. If a plan does not cover out-of-network services, then the consumer may, in most non-emergency instances, be responsible for paying the full amount charged by the out-of-network provider. Out-of-network providers may also be called “non-preferred” or “non-participating” providers.
Some examples of plan types that use provider networks include the following:
  • Health Maintenance Organization (HMO): A type of health insurance plan that usually limits coverage to care from doctors who work for or contract with the HMO. It generally won’t cover out-of-network care except in an emergency, or when a prior authorization to obtain care outside the network has been approved, or as otherwise required by law. An HMO may require a consumer to live or work in its service area to be eligible for coverage. HMOs often provide integrated care and focus on prevention and wellness. An HMO may require enrollees to obtain a referral from a primary care doctor to access other specialists.
  • Exclusive Provider Organization (EPO): A type of health plan where services are generally covered only if the consumer uses in-network doctors, specialists, or hospitals (except in an emergency). In general, EPOs do not require a referral from a primary care doctor to see other specialists, and in general there is very limited, if any, out-of-network coverage.
  • Point of Service (POS): A type of plan where a consumer pays less if they use in-network doctors, hospitals, and other health care providers. POS plans may require consumers to get a referral from their primary care doctor in order to see a specialist.
  • Preferred Provider Organization (PPO): A type of health plan where consumers pay less if they use in-network providers. They can use out-of-network doctors, hospitals, and providers without a referral for an additional cost.

Originally posted on CMS.gov

Health Insurance Basics: Part 1

Health Insurance Basics: Part 1

What is Health Insurance and Why is it Important?

Health insurance is a legal entitlement to payment or reimbursement for your health care costs, generally under a contract with a health insurance company. Health insurance provides important financial protection in case you have an accident or sickness. For example, health insurance may help to pay for doctors’ services, medications, hospital care, and special equipment when someone is sick or injured, often in exchange for a monthly premium. It may help cover a stay at a rehabilitation hospital or even a portion of home health care. Heath insurance can also keep a consumer’s costs down when they are not sick. For example, it can help pay for routine check-ups. Most health insurance also covers many preventive services at no cost, such as immunizations and cancer screening and counseling.

What is a Health Insurance Plan (also called a health plan or policy)?

A health insurance plan includes a package of covered health care items and services and sets how much it will pay for those items and services. In other words, a health plan will describe the types of health care items and services it will cover (help pay for), how much it will pay for those items and services (or groups of items and services), and for how long. Plans are often designed to last for a year at a time (known as a “plan year” or “policy year”). A health plan may be a benefit that an employer, union, or other group sponsor provides to employees or members to pay for their health care services.

What are Some Types of Health Care Coverage?

Health care coverage is often grouped into two general categories: private and public. The majority of people in the U.S. have private insurance, which they receive through their employer (which may include nongovernment employers or government employers at the federal, state or local level), buy directly from an insurance company, or buy through a Health Insurance Marketplace®.1 Some people have public health care coverage through government programs such as Medicare, Medicaid, or the Veteran’s Health Administration. Health care coverage can also be categorized by the scope of benefits it offers or how long the coverage lasts. Health insurance often includes a wide range of covered services, including emergency and nonemergency services as well mental health benefits. Some people have very limited insurance plans, such as plans with benefits for only specific conditions or diseases (included in the list of “excepted benefits” under the Affordable Care Act, such as vision-only plans or cancer plans).

As noted above, many health plans offer coverage for a year. However, some plans offer coverage for less than 12 months, including plans created to fill gaps in coverage. These plans are called short-term limited duration plans, and they often offer fewer benefits as compared to other health plans and lack some of the consumer protections available under other forms of coverage.

Self-Insured Employer Plans vs. Fully-Insured Plans

For consumers who receive health insurance through their employer, there are typically two different funding structures employers use to provide coverage:

  • Some employers offer health care coverage to their employees through a self-insured plan. This is a type of health plan that is usually offered by larger companies where the employer collects contributions from employees via payroll deductions and takes on the responsibility of paying all related medical claims. These employers can contract with a thirdparty administrator (in some cases, a health insurance company acting as an administrator) for services such as enrollment, claims processing, and managing provider networks. Alternatively, these employers can self-administer the services. Self-insured plans are regulated by the federal government and are generally not subject to state insurance laws.
  • A fully-insured employer plan is a health plan purchased by an employer from an insurance company. The insurance company, instead of the employer, takes on the responsibility of paying employees’ and dependents’ medical claims in exchange for a premium from the employer.

Originally posted on CMS.gov

Why Health Insurance is Important

Why Health Insurance is Important

Protection from high medical costs

Health insurance provides important financial protection in case you have a serious accident or sickness.  People without health coverage are exposed to these costs. This can sometimes lead people without coverage into deep debt or even into bankruptcy.
It’s easy to underestimate how much medical care can cost:
  • Fixing a broken leg can cost up to $7,500
  • The average cost of a 3-day hospital stay is around $30,000
  • Comprehensive cancer care can cost hundreds of thousands of dollars
Having health coverage can help protect you from high, unexpected costs like these.
When you have coverage, your plan protects you from high medical expenses 2 ways:
  • Reduced costs after you meet your deductible Once your spending for covered services reaches your plan’s deductible, the plan covers part of your medical expenses.
    • Example: If your plan has a $1,000 deductible, you pay the first $1,000 in covered services. After that, your plan pays between 60% and 90% of your covered expenses, depending of what kind of plan you have. You pay between 10% and 40% of the costs as coinsurance or copayments.
  • Out-of-pocket maximum This is the total amount you’ll have to pay no matter how much covered care you get in a plan year.
    • Example: If your plan has a $3,000 out-of-pocket maximum, once you pay $3,000 in deductibles, coinsurance, and copayments the plan pays for any covered care for the rest of the year. This provides important peace of mind and protection from very high medical costs.

Pay less even before you meet your deductible

Even before you meet your deductible, you may save hundreds of dollars in medical costs.
This is true if your plan is a PPO, an HMO, an EPO, or another kind of plan with a network of care providers.

How you save money before you meet your deductible

Insurance companies negotiate discounts with health care providers, and as a plan member you’ll pay that discounted rate. People without insurance pay, on average, twice as much for care. This means when you use a network provider you pay less for the same services than someone who doesn’t have coverage – even before you meet your deductible.
  • Sometimes these savings are small. If you’re insured and use a network provider, you may pay $25 for a flu shot instead of the $40 someone without coverage pays.
  • In other cases the savings can be big. If use a network provider, you may pay $85 for an office visit instead of the $150 someone without coverage pays. Savings can be even higher for more expensive services.
So even if you don’t reach your deductible during the year, you can save a lot of money on your covered medical services just by being enrolled in an insurance plan.
Originally posted on HealthCare.gov
Information Is Power – Be an Informed Healthcare Consumer!

Information Is Power – Be an Informed Healthcare Consumer!

With health care costs on the rise, it’s more important than ever to take responsibility for your medical care choices. Asking questions and researching your options are good ways to start taking control of how much you spend on health care. Becoming an educated healthcare consumer is important for making informed decisions about your health and getting the best possible care. Here are some steps you can take to become an educated healthcare consumer:

  1. Research and gather information: Start by researching healthcare providers, hospitals, and clinics in your area. Look for information about their reputation, specialties, and patient reviews so you know the best places to seek dependable care.
  2. Understand your health insurance: Familiarize yourself with the details of your health insurance plan, including coverage, deductibles, copayments, and network providers.
  3. Seek reliable sources: Use trusted sources of health information such as reputable medical websites, government health agencies, and academic institutions. Be cautious of misinformation on the internet and rely on evidence-based information to make informed decisions about your health.
  4. Prepare for appointments: Before visiting a healthcare provider, write down a list of questions or concerns you want to discuss. Bring relevant medical records, test results, and a list of medications you are taking. Being prepared will help you make the most of your appointment and ensure that your concerns are addressed.
  5. Communicate effectively: During your appointments, be an active participant in your healthcare. Clearly express your symptoms, concerns, and goals to your healthcare provider. Ask questions if something is unclear and request explanations for any medical terms or treatment options that you don’t understand.
  6. Understand treatment options: If your healthcare provider recommends a treatment or procedure, take the time to understand the benefits, risks, alternatives, and potential costs involved. Ask for additional resources or a second opinion if necessary.
  7. Advocate for yourself: Be proactive in managing your healthcare. If you have concerns about a diagnosis, treatment plan, or medication, don’t hesitate to speak up and ask for clarification or alternative options. Remember that you have the right to be informed and actively participate in decisions about your health.
  8. Review medical bills: Errors can occur in medical billing codes and in coverage, so taking a few minutes to read through the bill could save you money by catching potentially costly mistakes.  If you have questions or notice any discrepancies, contact your healthcare provider or insurance company for clarification.
  9. Take care of your overall health: Beyond specific healthcare encounters, focus on maintaining a healthy lifestyle. Eat a balanced diet, engage in regular physical activity, manage stress, and get sufficient sleep. Taking care of your overall health can help prevent many health issues and reduce the need for medical interventions.
  10. Stay informed and up to date: Continue to educate yourself about relevant health topics and advancements in healthcare. Stay informed about new research, treatments, and preventive measures

Remember, being an educated healthcare consumer is an ongoing process. By actively seeking information, communicating effectively with healthcare providers, and advocating for yourself, you can make informed decisions and take control of your health.

Healthcare 101: Back to Basics

Healthcare 101: Back to Basics

Getting sick can be expensive.  Even minor illnesses and injuries can be very costly to diagnose and treat.  Health care coverage helps you get the care you need and protects you and your family financially if you get sick or injured.

We’re breaking down the health insurance basics.  Because, when you understand it, you’re more likely to get preventive care, make better health decisions and even reduce your costs.

55% of people can’t answer basic health insurance questions and younger generations struggle with understanding the fundamentals of insurance even more.  69% of millennials and 64% of Gen Zers admitted they’ve opted not to seek care due to uncertainty about their health insurance.

Put simply, health insurance is a way to pay for your health care.  Your health insurance protects you from paying the full costs of medical services when you’re injured or sick.  And it works the same way your car or home insurance works: you or your employer choose a plan and agree to pay a certain rate, or premium, each month.  In return, your health insurer agrees to pay a portion of your covered medical costs.

How Health Insurance Payments Work

Your premium, or how much you pay for your health insurance each month, covers some or all the medical care you receive – everything from prescription drugs to doctors’ visits.  Most people choose a health insurance plan based on the benefits and medical services the plan covers, as well as on monthly cost.  But there are other factors to consider as well, like what you will be required to pay when you see a doctor or a health care facility.

These out-of-pocket payments are important to understand and know the differences between them:

  • Deductible – A deductible is the amount you pay out of pocket on healthcare costs before your insurance company starts to contribute to your healthcare costs for the year.  Generally, a plan with a lower deductible will have a higher monthly premium than a plan with a higher deductible.
  • Co-pay – A co-pay is a set fee you pay for a doctor visit.  For example, if your policy lists a co-payment of $20 for a doctor visit, you pay that amount each time you see the doctor.  Keep in mind that the co-pay will differ for different services.  What you pay for a trip to the emergency room will probably not be the same as a co-pay for a visit to your primary care physician.
  • Co-Insurance – Co-insurance is the amount you pay for covered health care after you meet your deductible. This amount is a percentage of the total cost of care – for example, if your co-insurance is 20%, your insurance covers the other 80%.  Co-insurance levels vary by plan, as do deductibles.
  • Out-of-Pocket Maximum – An out-of-pocket maximum is a limit on the amount of money you have to pay for covered services in a plan year.  After you spend this amount on your deductible, co-payments and co-insurance, your health plan pays 100% of the costs of covered benefits.

Knowing how your insurance and healthcare costs are structured is an important part of your personal finances.  When you choose a plan, look at your typical healthcare needs and costs so you can make the best decision for your health, and your wallet.