Frequently
Asked Health Insurance Questions
 What
is the best health plan for me?
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 copayments.
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?
The above content was used with permission from the
Agency for Health Care Policy and Research and Health Insurance
Association of America.
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.
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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 pay a copayment for each visit/service.
These copayments are typically higher than an HMO copayment but
not always.
- You will usually be responsible for paying an annual
deductible.
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.
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 join an HMO, you should find that you have few
out-of-pocket expenses for medical care -- as long as you use
doctors or hospitals that are part of the HMO.
What
is an HSA?
"HSA" stands for "Health Savings Account," and Health Savings
Accounts are great news for Americans!
The U.S. Congress recently passed legislation which makes
paying for medical expenses much more affordable for consumers.
As of January 1, 2004, the new law provides broad access to
Health Savings Accounts, which allow consumers to pay for
qualified medical expenses with pre-tax dollars (income-tax
free!) and save for retirement on a tax-deferred basis.
An HSA is tax-favored savings account that is used in
conjunction with a high-deductible HSA-eligible health insurance
plan to make healthcare more affordable and to save for
retirement.
HSAs are similar to IRAs, but even better:
Pre-tax money is deposited each year into an HSA and can be
easily withdrawn at any time with no penalty or taxes to pay for
qualified medical expenses. Withdrawals can also be made for
non-medical purposes, but will be taxed as normal income and are
subject to a 10 percent penalty if done prior to age 65.
Any HSA funds not used each year remain in the account, and
earn interest tax-free to supplement medical expenses at any
time in the future.
Like an IRA, the account belongs to you, not your employer.
But unlike an IRA, your employer CAN contribute to your HSA.
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What
is a POS?
POS is a Point-of-Service Plan 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 network provider and pay a flat dollar or to an
out-of-network provider and pay a deductible and/or a coinsurance
charge.
What
is an Indemnity Plan?
An indemnity plan is commonly known as a fee for service or
traditional plan. If you select an Indemnity plan you have the
freedom to visit any medical provider. You do not need referrals or
authorizations; however, some plans may require you to precertify
for certain procedures.Most indemnity plans require you to pay a
deductible. After you have paid your deductible, indemnity policies
typically pay a percentage of "usual and customary" charges for
covered services; often the insurance company pays 80% and you pay
20%. Most plans have an annual out of pocket maximum and once you've
reached this they will pay 100% of all "usual and customary" charges
for covered services.
Many health insurance companies have moved away from indemnity
plans and are instead offering managed care plans such as HMOs and
PPOs. You may have few or no indemnity plan choices in your area.
What
is a provider?
A provider is a hospital, healthcare facility, physician or other
medical professional that provides healthcare services.
What
is a Primary Care Physician (PCP)?
A physician or other medical professional who serves as a group
member's first contact with a plan's healthcare system. Also known
as a primary care provider, personal care physician, or personal
care provider. Return to top of page.
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