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Health Insurance FAQ
What is an HMO?
An HMO is a Health Maintenance Organization. As a member of an HMO, you select a primary care physician from a list of doctors in that HMO's network. Your primary care physician will be the first medical provider you call or see for a medical condition. He or she will make any needed referrals to a medical specialist. Typically, these specialists will be part of the HMO network.
- If you obtain care without your primary care physician's referral or obtain care from a non-network physician, except for emergency, you may be responsible for the entire bill.
- With most HMOs you will not be responsible for paying a yearly deductible and your expenses will consist of co-pays for visits and services.
What is a PPO?
A PPO is a Preferred Provider Organization. As a member of a PPO, you can use the doctors and hospitals within the PPO network or go outside of the network for care. You do not need a referral to see a specialist. If you join a PPO, you should find you have more flexibility than with an HMO, but your total out of pocket costs are likely to be somewhat higher.
- If you obtain care from a medical provider outside of the PPO network, you will pay more for the service. For example, a PPO might pay 90 percent of the cost for a visit with an in-network doctor but only 70 percent of the cost for a visit to a non-network doctor.
- You will typically be responsible for paying an annual deductible and maybe a co-pay.
What is a POS?
POS (Point-of-Service Plan) is a type of managed care plan combining features of health maintenance organizations (HMOs) and preferred provider organizations (PPOs). You can decide whether to go to a Tier 1 provider and pay co-pays similar to a HMO, go to a Tier 2 provider and pay a yearly deductible similar to a PPO.
What is a Co-Pay?
An office visit co-payment is a fixed dollar amount or a percentage that you pay for each doctor visit. For example, you may pay a fixed amount such as $5 or $10 per visit.
What is a Deductible?
A deductible is the amount of annual medical expenses that you must pay before the plan will begin to cover expenses. For example, if your plan has a $500 deductible, you will pay the first $500 of your medical expenses before your health plan begins paying the expenses. Only expenses for covered services apply towards the deductible. For example, if you paid $100 for a visit to a chiropractor but the plan does not consider chiropractic care a covered expense, then the $100 will not apply toward your annual deductible.
What is Co-Insurance?
After you have met your yearly deductible some PPO plans require you to pay a percentage of the medical bill. For example if you met the $500 deductible on a $1000 medical bill, and you have a 20% co-insurance you are obligated to pay 20% of the remaining $500 in charges.
What is an In-Network and Out-of-Network Medical Provider?
An in-network medical provider is on the approved list of providers for a particular health plan. An out-of-network provider is not on the list. If you visit a doctor within the network, the amount you will be responsible for paying will be less than if you go to an out-of-network doctor. As a general rule, HMOs tend to have smaller provider networks than PPOs.
How Do I Choose A Health Plan?
Choosing between health plans is not as easy as it once was. Although there is no one "best" plan, there are some plans that will be better than others for you and your family's health needs. Plans differ in how much you have to pay and how easy it is to get the services you need. Although no plan will pay for all the costs associated with your medical care, some plans will cover more than others.
With any health plan you will pay a basic premium, usually monthly, to buy the health insurance coverage. In addition, there are often other payments you must make. These payments will vary by plan but essentially are deductibles and co-payments.
Here's a list of key questions to consider in selecting the plan that best meets your needs:
- How much will it cost me on a monthly basis?
- Are there deductibles I must pay before the insurance begins to help cover my costs? After I have met the deductible, what part of my costs are paid by the plan?
- What doctors, hospitals, and other medical providers are part of the plan? Are there enough of the kinds of doctors I want to see?
- Where will I go for care? Are these places near where I work or live?
- If I use doctors outside a plan's network, how much more will I pay to get care?
- Are there any limits to how much I must pay in case of major illness?
- What about limits and deductibles for certain types of care such as surgery or maternity?
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