In our prior post on health insurance, we gave an overview of the health insurance system in our country.  In this post, we explain the different types of coverage and some common health insurance terms.  

Understanding Health Insurance Coverage

Health insurance comes in many shapes and sizes and involves confusing acronyms such as HMO, PPO, and POS.  Your coverage, deductible, co-pays, and provider choices can be difficult to understand.  We hope these explanations help simplify these sometimes complicated issues.

FEE-FOR-SERVICE PLANS

With many insurance plans your coverage will only pay for “in-network” doctors.  Fee-for-service plans generally allow you to see any doctor with few restrictions and without the need for a referral from your primary care doctor.  You usually pay for this flexibility as these plans are more expensive than most.      

HEALTH MAINTENANCE ORGANIZATIONS (HMOs)

HMOs are a less expensive options that offer fewer doctor choices.  Traditional HMOs rely on agreements with a network of health care practitioners and hospitals to provide health benefits at a reduced price.  

Typically, an HMO plan will assign you to the care of primary care doctor who will coordinate all of your health care. This is the doctor you will see whenever you need care. If you need to see a specialist, your primary care doctor will need to write you a referral. The specialist will most likely also be in the HMO’s network or employed by the HMO.

HMOs WITH POINT OF SERVICE OPTION

Certain kinds of HMOs, called HMOs with a point-of-service (POS) option, offer more flexibility. These plans will cover most or all of the costs if your primary care doctor refers you to a specialist not in your plan. 

You can also choose to see a doctor outside the plan, in exchange for paying part of the medical costs – such as a separate deductible, co-pays, or a portion of the bill, called co-insurance.  These terms are discussed in more detail below.

PREFERRED PROVIDER ORGANIZATIONS (PPOs)

A PPO is a cross between a fee-for-service plan (focusing on doctor choice) and an HMO (focusing on low cost). Like an HMO, the PPO plan uses a network of preferred providers to reduced prices. But, like a fee-for-service plan, you do not need a referral from a primary care doctor to see a specialist. Also, you can decide to see out-of-plan doctors and still get some coverage. However, the plan will pay more of your costs if you see an in-network doctor.

HIGH-DEDUCTIBLE HEALTH PLANS

High-Deductible Health Plans (HDHPs), also known as consumer-directed health plans, are pay as you go plans.  They offer coverage only after you reach a deductible that is significantly higher than in traditional insurance plans. Because these plans have such high deductibles – from about $1,000 to more than $10,000 – they tend to have much lower premiums than traditional insurance.

While the deductibles in an HDHP can be very high, often the plan provides some reimbursement for preventive services so you can schedule some “wellness care,” such as immunizations, before meeting the deductible. And most HDHPs give you access to the discounts the insurers negotiate with doctors and hospitals, so even though you are paying for care yourself, you are paying lower, in-network rates

No matter what type of plan you have (HMO, PPO, etc.), certain terms and provisions will apply.   These include:

Premium: The amount you or your employer pays the health plan to purchase health coverage.

Deductible: The amount that you pay out-of-pocket before your health insurance begins to pay covered expenses.  For example, you might have to pay a $500, $1,000, or $2,500 deductible per year, before your health insurance begins paying for medical care.

Co-Payment: The amount that you must pay out of pocket before the health insurer pays for a particular visit or service. For example, an insured person might pay a $45 co-payment for a doctor’s visit, or to obtain a prescription.  The co-pay typically does not count toward your deductible.

Co-Insurance: Co-insurance is a percentage of the total cost that you may be required to pay. For example, you might have to pay 20% of the cost of a surgery over and above a co-payment, while the insurance company pays the other 80%.  There is usually a maximum that applies to the co-insurance you are required to pay. 

Exclusions: Not all services are covered. You are generally expected to pay the full cost of non-covered services out of your own pocket.

Coverage limits: Some health insurance policies only pay for health care up to a certain dollar amount.  You may be expected to pay any charges in excess of the coverage limit.  Also, beware of insurance schemes that have annual or lifetime coverage maximums.  When a maximum coverage applies, the health insurance will stop payment when the benefit maximum is met, and you must pay all remaining costs.

Out-of-pocket maximums: Similar to coverage limits, except that in this case, your payment obligation ends when you reach the out-of-pocket maximum, and health insurance pays all further covered costs.

Health insurance can be complicated and difficult to understand.  Make sure you do your research and you understand the deductibles, co-pays, and co-insurance obligations of the policy and the applicable exclusions, coverage limits, and out-of-pocket maximums.

As many of you know, the Patient Protection Affordable Care Act (“PPACA”) signed by President Obama in 2010 impacts many of these policy provisions, mainly to the benefit of the injured and sick.  However, the law is currently before the United State Supreme Court, and it is unclear whether the law will be struck down.  In an upcoming post, we will explain some of the features of the new health care law and what it means to you.

We don’t just handle our client’s personal injury and workers’ compensation lawsuits.  We make sure our hurt truck driver clients are informed about all of the options available to pay their bills and get medical care while their lawsuit is pending.  We will discuss all of your options with you, including options available under your health insurance.     

If you have been injured, we would be happy to speak with you free of charge. You can contact us at 855-4-HURT-TRUCKER (855-448-7887) or email us at [email protected] or contact us on Facebook or Twitter.