| Trying to understand the ins and outs of health insurance can be pretty complicated.
That's why we've put together this easy-to-understand guide to health insurance
including simple definitions, important questions and a glossary of insurance
terms, as well as a health plan search feature that will help you identify
which insurance plans are accepted by the hospitals and doctor groups in the
Sutter Health family.
A simple guide to health insurance
PPO. HMO. POS. Indemnity. What does it all mean?
At the most basic level, every health plan is all about ‘coverage.’
Or simply what types of treatments, visits, procedures, benefits, etc., that
a health plan pays for. Although the same condition - emergency care, let's
say - is included in many plans' coverage, it doesn't mean that a plan pays
for 100% of the cost of emergency care. Some plans cover 80% of the expenses
incurred, others may pay 50%. When shopping for a health plan, you’re
really looking for the kind of coverage that's most beneficial to you.
Having said that, there are five basic types of health plans you should know
about that are available to people who do not receive Medicare or Medi-Cal.
- INDEMNITY INSURANCE (also called Fee-For-Service)
This is the type of insurance coverage you're probably most familiar with.
It pays for most of your health problems, but doesn't usually pay for preventive
care like well-child visits and physical exams. Indemnity insurance doesn't
cover the total cost of your health care. Coverage is usually limited to
a percentage of the billed amount and only kicks in after you’ve met
your deductible (a yearly, fixed amount of expense.) Under an indemnity plan,
you can see any doctor at any hospital you want, but the monthly premium
is usually higher than with other types of health plans.
- HMO (Health Maintenance Organization)
An HMO covers most of your health care needs, including checkups, immunizations
and hospitalization, for a small co-payment typically between $5 and $40.
With an HMO there are no claim forms to fill out, but you can only go to
doctors and hospitals affiliated with your plan unless it is a medical emergency.
A list of affiliated physicians is typically provided by the HMO.
- EPO (Exclusive Provider Organization)
An EPO typically functions in the same way as an HMO, but the network may
be more exclusive.
- PPO: Preferred Provider Organization
A PPO plan covers many of your health care needs for a small per-visit fee
as long as you choose from a list of "preferred providers." You
are able to choose to see a doctor who's not on the list, but you'll foot
a greater part of the bill and may have to pay a deductible. Some PPOs do
require claim forms.
- POS: Point of Service
A POS plan gives you two different choices each time you use health care
services. One choice is to use the plan just like an HMO where you will be
responsible for your standard co-payment, choosing physicians who are on
the list of preferred physicians, and getting authorizations for certain
services and referrals to specialists. The other choice is to use your health
plan just like an indemnity plan by choosing care from any provider, without
coordinating care through your primary care physician or health plan. When
using your health plan like indemnity insurance, you are generally responsible
for a deductible and a percentage of your bill.
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Good health plans start with the right doctor
The first step in choosing a health plan that's right for you is choosing a
doctor who's right for you. If you have a doctor you like, find out the plans
in which he/she participates.
Next, consider your special medical needs. If you regularly see a particular
cardiologist, allergist or any other specialist, you may want a plan that lets
you continue doing so without a referral. (This is especially true when choosing
an HMO, which may require an authorization to see certain specialists.)
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Choosing the health plan that is right for you
With so many different options the important thing is choosing the plan that
fits your life and needs best. Below you’ll find some sample situations
and questions to help you figure out exactly what kind of health plan you need.
Sample Situations
- You're single, you make a decent living, and you're perfectly healthy.
Since you rarely see a doctor, your best move is to choose a plan with a
low monthly premium and a higher co-payment. But you should also look for
a plan with good coverage in areas that are important to you, such as routine
physicals and emergency care.
- You're married and planning a family.
You want a health plan with good maternity and well-child care. You should
also plan for unforeseen circumstances like emergency Caesarean section or
infertility problems. Well-child care should cover routine checkups and immunizations.
And you’ll want to look for a plan with low co-payments since you'll
be seeing your doctor a lot.
- You’re family has grown to four and your oldest is starting
school.
You'll want a plan with low co-payments because those visits to the pediatrician
will really add up. Immunizations, check-ups and prescriptions should all
be covered expenses. If you already have a pediatrician you like, choose
a plan with which he/she is affiliated.
- You’re a 40-50 year old with a fixed monthly income.
You have just been diagnosed with a medical problem for which you must undergo
ongoing treatment. You'll need a health plan that lets you see specialists
as often as you need. Prescriptions should definitely be covered expenses
and since your income is modest, low co-payments are important.
Before you start reading the insurance brochures, take the time to make a
list of questions regarding the issues that are important to you.
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Questions to ask
Q. Can I see my own primary care physician and specialists?
A. Different types of plans have different rules about which doctors you can
see. If you can't find the answer on this Web site, ask to see a list of participating
doctors. Before you sign up with any plan, ask your doctor if he/she is still
affiliated with that plan and can refer you to the specialist of your choice.
Q. If I have an ongoing health problem or condition, how will the
plan cover it?
A. Some plans let you see specialists (like orthopedists or allergists) as
often and for as long as you want. Others require authorization based on the
referral being medically necessary according to your primary care physician.
If you take medications, prescription coverage is important. Some plans also
have different pre-existing condition restrictions. Be sure to read the fine
print.
Q. Is maternity care covered?
A. Check your plan for coverage of routine checkups, screening tests, and prenatal
educational classes.
Q. Does the plan cover preventive care for my children?
A. Plans vary in their coverage of periodic physicals, immunizations and school
physicals.
Q. Do I have to fill out claim forms?
A. As a general rule, when receiving covered services, HMOs do not require
you to complete claim forms. For POS and PPO plans claim forms are not generally
required when you visit participating providers and have obtained the necessary
authorizations. Indemnity Plans usually require you to do the claim form paperwork.
Q. Is the least expensive plan always the best buy?
A. Start with a plan that offers coverage that matches your needs. If all things
are equal, only then should you consider the cost. You'll need to look at monthly
premiums versus out-of-pocket costs (deductibles, co-payments) to determine
what will cost you the least throughout the year.
Q. How can I minimize out-of-pocket expense and maximize coverage
to receive the highest level of benefits available?
A. HMO, PPO, and POS plans are generally less costly. Within those plans, you
can minimize out-of-pocket expenses by selecting participating providers and
obtaining referrals and authorizations when necessary.
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Glossary of important terms
Allowed Expenses: The maximum amount a plan pays for a covered
service. See Usual and Customary Charges.
Benefits: These are medical services for which your insurance
plan will pay, in full or in part.
Claim: A notice to the insurance company that the insured
received care covered by their plan. A claim is also a request for payment.
Co-insurance: A shared payment between an insurance company
and an insured individual. Usually described in percentages; for example, the
insurance company pays 80% of covered charges and the individual pays 20%.
Co-payment: The insured individual's portion of the cost,
usually a flat predictable dollar amount, like $10 per office visit. Under
many plans, co-payments are made at the time of the service and the health
plan pays for the remainder of the fee.
Coverage: What the health plan does and does not pay for.
Coverage includes: benefits, deductibles, premiums, limitations, etc.
Covered Expenses: What the insurance company will consider
paying for per the contract. For example, under some plans generic prescriptions
are covered expenses while brand name prescriptions are not.
Deductible: A portion of the covered expenses (typically
$100, $250 or $500) that an insured individual must pay before insurance coverage
with co-insurance goes into effect.
Managed Care Plan: A term that typically refers to any health
plan with specific requirements which enable your primary care physician to
coordinate or manage all aspects of your medical care.
Maximum Out-of-Pocket: The most money you can expect to pay
for covered expenses. Some companies count deductibles, co-insurance, or co-payments
toward the limit. Once the maximum out-of-pocket has been met, the health plan
pays 100% of certain covered expenses.
Open Enrollment: A specified period of time each year in
which employees may change insurance plans and medical groups offered by their
employer and have the new insurance effective at a later date.
Pre-existing Condition: Generally, a medical condition first
treated or that first manifested itself prior to your enrollment in a plan.
Some plans totally exclude pre-existing conditions from coverage; others have
a waiting period of six months to a year.
Preauthorization: An insurance plan requirement in which
you or your primary care physician need to notify your insurance company in
advance about certain medical procedures (like outpatient surgery) in order
for those procedures to be considered a covered expense.
Premium: The money paid to a health plan for coverage. Premiums
are usually paid monthly and may be paid, in part or in total, by your employer.
Primary Care Physician (PCP): Many plans ask you to name
a family practice doctor, pediatrician or an internal medicine physician as
your primary care physician. A PCP is responsible for coordinating all of your
care.
Provider: The supplier of health care services. This could
be a physician, a hospital, a physical therapist, etc.
Specialist: A physician who practices medicine in a specialty
area. Cardiologists, orthopedists and gynecologists are all examples of specialists.
Some health plans require preauthorization from your primary care physician
before you can see a specialist.
Usual and Customary Charges: The average cost of a specific
medical procedure in your geographic area. This is the maximum amount some
insurance companies will pay for certain covered expenses.
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What plans are accepted within Sutter Health?
Sutter Health is not a health plan, but a network of doctors and hospitals
that provide medical care, which is paid for by different health plans and
insurers. Use the feature below to determine which plans are accepted by Sutter
hospitals, and by the doctor groups associated with our network.
Accepted
Health Plans - online search feature on www.sutterhealth.org
(this link opens in a new window)
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