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Choosing a plan can be difficult, especially when you don’t understand half of the verbiage being used. Plan names like PPO, HMO, HSA, aren’t exactly terms we use everyday. Below you will find brief descriptions of all the different kinds of plans that you can purchase from us. If at any time you need more information, feel free to contact me either by phone or email.
Health Maintenance Organization (HMO)
An HMO is a health plan in which physicians, hospitals and other health care providers either contract with or are employed directly by the HMO to provide services. HMO's are typically higher priced plans and are for those that need maternity coverage or people who prefer to pay a little more, but have less out of pocket expenses. HMOs vary in design. Generally, you choose a single Primary Care Physician (PCP) who provides the majority of your care. Depending on the type of the HMO, services may be provided in a central facility, or in a physician's own office (as with IPAs.)
Preferred Provider Organization (PPO)
A PPO is a group or network panel of selected health care providers who have agreed to offer comprehensive services at preset reimbursement levels in exchange for a high volume of patients. These providers including physicians, hospitals and other health care providers are referred to as "network" providers. PPO's are most widely used in individual and family plans where maternity coverage isn't needed, or for those that desire greater flexibility when choosing between various types of Doctors since PPO's don't require referrals to see Specialists and can choose any Physician within the network. Enrollees also have the ability of using non-network providers, though out-of-pocket costs will be higher.
Indemnity
An indemnity plan is "traditional" health care coverage in which reimbursement is made either to the enrollee or directly to the provider, up to a predetermined dollar amount or benefit limit. Payments are made based on usual, customary and reasonable (UCR) fees as established by the health care plan administrator. You are responsible for charges exceeding the UCR. Any health care provider can
be used.
Indemnity health insurance plans are also called "fee-for-service." These are the types of plans that primarily existed before the rise of HMOs, IPAs, and PPOs. With indemnity plans, the individual pays a pre-determined percentage of the cost of health care services, and the insurance company (or self-insured employer) pays the other percentage. For example, an individual might pay 20 percent for services and the insurance company pays 80 percent. The fees for services are defined by the providers and vary from physician to physician. Indemnity health plans offer individuals the freedom to choose their health care professionals.
Open-ended HMOs:
HMOs which allow enrolled individuals to use out-of-plan providers and still receive partial or full coverage and payment for the professional's services under a traditional indemnity plan.
Health savings account (HSA):
This is a tax advantaged savings plan (a financial account with various restrictions) available to taxpayers in the United States to cover current and future medical expenses. It allows money to be put in before tax is paid on it and then to withdraw the money tax free for qualified medical expenses.
A person must be covered by a High Deductible Health Plan (HDHP) to be eligible for an HSA. The premium for a HDHP generally is less than the premium for traditional health care coverage. Money saved on insurance premiums might be put into the Health Savings Account, or employed for other purposes.
Long-Term Care Policy:
Insurance policies that cover specified services for a specified period of time. Long-term care policies (and their prices) vary significantly. Covered services often include nursing care, home health care services, and custodial care.
Independent Practice Associations:
IPAs are similar to HMOs, except that individuals receive care in a physician's own office, rather than in an HMO facility.
Short-Term Disability:
An injury or illness that keeps a person from working for a short time. The definition of short-term disability (and the time period over which coverage extends) differs among insurance companies and employers. Short-term disability insurance coverage is designed to protect an individual's full or partial wages during a time of injury or illness (that is not work-related) that would prohibit the individual from working.
Triple-Option:
Insurance plans that offer three options from which an individual may choose. Usually, the three options are: traditional indemnity, an HMO, and a PPO.
Other Helpful Definitions:
In-Network:
Describes a provider or health care facility which is part of a health plan's network. When applicable, insured individuals usually pay less when using an in-network provider.
Out-of-Network:
Describes a provider or health care facility which is not part of a health plan's network. Insured individuals usually pay more when using an out-of-network provider, if the plan uses a network.
Deductible:
The amount an individual must pay for health care expenses before insurance (or a self-insured company) covers the costs. Often, insurance plans are based on yearly deductible amounts.
Co-Insurance:
Co-insurance refers to money that an individual is required to pay for services, after a deductible has been paid. In some health care plans, co-insurance is called "co-payment." Co-insurance is often specified by a percentage. For example, the employee pays 20 percent toward the charges for a service and the employer or insurance company pays 80 percent.
Co-Payment:
Co-payment is a predetermined (flat) fee that an individual pays for health care services, in addition to what the insurance covers. For example, some HMOs require a $10 "co-payment" for each office visit, regardless of the type or level of services provided during the visit. Co-payments are not usually specified by percentages.
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