Health insurance is a complex puzzle for many people, including the doctor’s office staff that does claims processing. When we look for health insurance, we want to know what benefits are covered, the total cost of services, including premiums, and what our portion of the cost entails.
As a former member of a medical financial staff, I spent many hours assessing reasons for denial of payment on claims that stemmed from patient services, not covered, or limited by insurance providers.
If your employer provides group health insurance, they’ve done the cost and benefit negotiating with the insurer. With group insurance, your costs are significantly lower and you have some options. If you purchase an individual plan, the costs vary, as do paperwork and reimbursement procedures.
Many employers provide managed care group insurance plans because of cost benefits. The cost is less to you as long as you use network providers and abide by the specific rules of the plan you select.
Premium is the monthly/yearly cost of the insurance.
Deductible is the dollar amount that must be spent by the insured before the plan starts to pay for medical services.
Coinsurance is a percentage of fees that are paid by the insured for the cost of services.
Copay is a flat fee for services.
Out of pocket expense is your expense for services.
Reimbursement can be a percentage of actual charges or it can be actual charges.
Lifetime benefits are the maximum benefits that will be paid by the insurance provider in your lifetime.
MANAGED CARE PLANS
For the past twenty years, employers have been offering managed care choices to employees. Managed care applies to HMO, PPO, and POS providers.
HMO: Health Maintenance Organization
You pay a lower monthly premium, there is no deductible, no lifetime maximum benefits and you pay only flat co-pay for each doctor visit. Benefits are paid the first time you use the insurance.
HMO plans are more rigid than PPO and POS plans. Specialist services require a referral from your primary care physician and you must remain in the provider network in order for benefits to be paid. Precertification is required before hospitalization except for emergency procedures.
PPO: Preferred Provider Organization and POS: Point of Service plans
You pay a higher monthly premium, pay a deductible, pay a coinsurance and out of pocket expenses. Many plans are 80/20 where you pay 20 percent of the cost for medical fees. PPO and POS offer more flexibility and you get to keep your regular physician. This flexibility makes them a popular managed care choice.
Your costs are lower if you stay within the network providers and you don’t need a referral to see a specialist, but in some instances you may have to pay the full cost and then be reimbursed by the insurance company.
You deductible must be met before the insurance plan starts to pay and out of pocket expenses may be higher.
When you become unemployed and need insurance, COBRA is the policy that carries you until you’re able to obtain other insurance through a new employer. It’s more expensive than group insurance but vital to some people with medical conditions. Your employer is required to inform you about COBRA as an interim insurance.
These plans reimburse your medical expenses with no limitation on who provides the service. The insurer pays a specific dollar amount per day for a maximum amount of days. The cost is higher than managed care plans with fewer options.
Group health insurance is a better option all around with lower costs to you and more choices than an individual health insurance policy offers. If you have questions about your health insurance plan, a staff member in your doctor’s financial office is there to help you find the correct answers. Don’t be shy about asking questions.