Many individuals may get employer-based insurance policies. However, the policies may be out of budget for some. Therefore, they turn to the Affordable Care Act Market Exchange if they do not have employer-base insurance and do not qualify for Medicaid and not over the age of 65. Even if they are 65 years of age and want a medical plan that covers what Medicare covers and extra benefits. To be able to make an educated decision one must understand the core benefits of the plans, the acronym stands for, and the advantages and disadvantages of the plans.
There are four components to a health insurance policy. There are Provider Network, Drug Formularies, Premium, Deductibles, and the plan benefits. The plan benefits may be different for each carrier.
The Provider Network is a list of doctors, hospitals, and other health care providers that are contracted with an insurance carrier to provide medical care to its members. The contracted providers are known as “in network” or “network providers”. The health provider that is not contracted with the carrier is know as “out of network” (OON).
The next component is the Drug Formulary or better known as the drug list. A drug list is the list of preferred drugs that is consistently being updated that is approved by the drug plan or any insurance plan that covers prescriptions. The drug plan may contain information about the doses, side effects, contraindicators, and any other relevant information. The drug list helps control cost for insurance carriers and their policy holders.
Another core component is the deductible. This is the amount that an individual pays out of pocket each year before the health plan will pay out. There are two types of deductibles. A low deductible (LDHP) and high deductible (HDHP). The HDHP is a plan that members spend less on the premium or amount withdrawn each pay period. This plan is good for those that do not have a lot of health issues and does not anticipate having emergencies. The bad thing about this type of deductible is the individual is responsible for the bill out of pocket until the deductible is met.
To offset this out-of-pocket expense, this type of deductible may qualify to be paired with a health savings tool called an HSA. Individuals contribute to a special account to be used for qualified medical expenses. The amount left over each year is then rolled over to the next year.
While this type of plan may cause a financial burden if there is an unexpected emergency or test that needs to be performed. Individuals may forgo medical treatment or medications to save them from spending money and may put their health in jeopardy.
The low deductible health plans are a way to pay less money upfront before the health plan stats paying. The type of policy will have a higher premium. With this deductible an individual is able to manage their out-of-pocket expense because a health plan starts to pay earlier. This deductible is designed for those that need medical care on a regular basis.
The last core component is the benefit plan. While all insurance carriers must have the core components of a health plan, some insurance carriers offer different drug list, and network medical providers. A benefit plan is a summary of what is included in the plan and any exclusions the plan may have.
Many people will probably get confused when hearing the acronym such as HMP, PPO, EPO and POS. Some may not even know what they mean. The first one is HMO which refers to Health Maintenance Organization. The type of plan is cheaper than other policies. This type of plan restricts coverage of service from health providers that are contracted with an HMO. Out of network services will not be covered. An exception to this is when there is an emergency. HMOs mostly provide a patent with integrated services and are focused on preventions and wellness.
The advantage of having an HMO, is that the plans are a little more affordable. They coordinate the care if the physician feels the patient will benefit from a specialist to provide a more in-depth treatment, then the PCP will create a referral to the specialist. This type of care can provide relief when a person is not feeling well.
The disadvantage of an HMO is having a limited option of medical professions. The HMO is able to offer their plans at a cheaper rate because of the small network of providers. Another disadvantage is the coverage is not able to travel. An individual that travels and needs medical care that is not an emergency will have to pay the entire cost of the visit out of pocket. If the individual needs to see a specialist they must have the PCP refer them. If a referral is not received then the individual must pay out of pocket. One thing to keep an eye on is if the provider, hospital or other medical providers drops the contract with the health carrier. The individual must select a PCP soon as possible to continue the supervision of care.
A PPO is referred to as a Preferred Provider Organization. This health plan contracts with health care provides such as physicians. Hospitals, and other medical provides contracted with the insurance carrier. Using this type of insurance, you will pay less if they are contracted. If seeing a provider out side of network will be additional cost.
The advantages of an PPO are an individual does not have to change providers. The individuals may choose a doctor, however, if doctor is in network, they may offer discounts. Another advantage is the individuals does not need a referral to receive care from a specialist and they have a choose of primary care doctor.
The disadvantages of an PPO are the premiums are higher. Most costs of service are out of pocket. One must monitor the network to out of network to control cost.
The next type is an EPO. This type of insurance is an exclusive provider organization. This means it is a health plan that is managed where services are covered when seeking care from physician, specialist, or hospitals in the plans network except when in an emergency.
The EPO advantages has a low monthly premium. There is a large network of providers. Another advantage is an individual does not have to select a primary care doctor. Also, referrals are not needed to see a specialist.
Like everything else there are disadvantages to this type of plan. The disadvantages are having a high deductible and there is not cover for out of network office visits. Also some of the plans have the no referral needed to see a specialist.
The last type of insurance to cover is the POS. The point of sale is a plan that individuals pas less if using a physician, hospital or other health providers that are with the plans network. A referral from the primary doctor is required to see a specialist.
The advantage of using a POS plan is having the freedom to choose doctors that may not be in network. This offers ample opportunities to receive services from medical providers they are comfortable with. Also, this type of plan is not restricted to a certain area.
On the other side however are the disadvantages. The plan requires a referral from your PCP which can be time consuming. Also, a member will be faced with an amount of paperwork to file out. Also seeing an out of network provide, the few is pained upfront which is not always financially possible. To get a reimbursement a member has to file a claim for reimbursement. When wanting to see a specialist a member must have a referral to a specialist if not then the member may not receive a reimbursement or they may get a partial reimbursement. Another disadvantage of a POS policy is a member can expect to pay 30-40 percent of the bill out of pocket.
An individual can make an educated decision on the type of health insurance that will fit their needs. Each policy acronyms were described. The other thing an individual learned was the advantages and disadvantage. It is really important to look at the benefits that will be more useful. This will not only help you when seeing the medical profession and save money on plans that does not meet your needs.
Written by: Rose Thompson, Independent Health Agents