With all of the various managed care plans available today, choosing between health plans is not as easy as it used to be. Even though the many choices available may be a bit confusing, there is certain to be an optimal choice to meet your specific needs. Plans differ in how much you have to pay and how easy it is to get the services you need. With any health plan, you will pay a monthly premium for the insurance. In addition, there are other payments you must make. These payments vary by plan, but essentially consist of deductibles and co-payments.
In general, the more flexibility you have in selecting providers for treatment, the more expensive the plan will be in terms of premium, deductibles and co-payments. The least flexible (highly managed care) plans, such as an HMO, will typically have lower premium and lower out-of-pocket costs for services provided.
Here are some 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 pay? After I have met the deductible, what costs are then paid by the health plan?
- What doctors, hospitals and other medical providers are part of the plan? Is my physician or other preferred providers available under the health plan?
- Where will I go to access care? Are the providers located close to where I work or live?
- If I use doctors outside a plan’s network, how much more will I have to pay?
- Are there any maximum limits to how much I must pay in deductibles and co-payments? What about different limits for certain types of services, such as surgery and maternity?
You can do a side-by-side comparison of benefits and prices for different plans using the “Compare” feature after you receive the list of quotes from our website. Simply check the box on the left hand side of each quote you wish to compare and click the “Compare” button located on the right hand side of each quote. Any differences in the plans will be highlighted in a different color for easy identification. If you have any further questions or would like professional advice, please call or e-mail us for assistance.
What types of health plans are available to me?
Health insurance plans are either Indemnity (fee-for-service) or Managed Care. Indemnity and Managed Care plans differ in the flexibility they offer in terms of provider choice, ranging from the most choice to the least choice respectively. The major differences concern choices of providers, out-of-pocket costs for covered services and how bills are paid. Usually, Indemnity plans offer more choice of doctors (including specialists, such as cardiologists and surgeons), hospitals, and other health care providers than managed care plans. Indemnity plans pay their share of the costs of a service only after they receive a claim form and bill from the insured.
Managed Care plans have agreements with certain doctors, hospitals and health care providers to give a range of services to plan members at reduced cost. In general, you will have no claim forms with an HMO and lower out-of-pocket costs. Besides Indemnity plans, there are three basic types of managed care plans: PPOs, HMOs and POS plans.
A Preferred Provider Organization (PPO) allows you to choose from the doctors and hospitals within a PPO network or go outside of the network for lesser benefits. A PPO is a network of physicians and hospitals that have agreed, by contract, to discount their rates to their members. The networks are typically very large and the members are free to seek care from any physician or provider within the network, including specialists without a referral. Members may also choose to see non-PPO providers, but at a higher out-of-pocket cost. Typically PPO plans might offer some front-end co-payments for such services as doctor visits and prescriptions. Most other covered services are typically subject to a calendar year deductible and/or co-insurance.
A Health Maintenance Organization (HMO) provides good benefits, often including extensive preventive care coverage and low out-of-pocket costs. Unless you have a Point-of-Service (POS) option or in the case of emergencies, there is typically no coverage for services from physicians or hospitals outside the HMO network of providers. Plans usually offer comprehensive benefits and affordable premiums with no deductibles and minimal cost-sharing (such as low co-payments for doctor office visits and other services). A primary care physician (PCP) that you select from within the network oversees all of your health care needs (acting as a gatekeeper). Unless you have a direct access or direct referral as a feature in your plan, your PCP will coordinate all referrals to specialists when necessary.
A Point-of-Service (POS) plan type of managed care plan combines features of an HMO and a PPO. 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 co-insurance charge. A Point-of-Service plan is less restrictive than an HMO because at the time medical services are needed (i.e., the Point-of-Service) you may choose between several different plan options, such as an HMO, PPO or Indemnity. Point-of Service plans have made arrangements for lower fees with a network of health care providers and give their policyholders a financial incentive to stay within their network.
Like an HMO, POS plans require a gatekeeper, or primary care physician (PCP), that must be used for the HMO coverage component of the POS options. The PCP must be selected from the plan’s provider directory. However, as with the PPO, you can choose to go out of network and still receive benefits. The PPO benefits will not be as good as the HMO benefits because of the added freedom to choose from many PPO providers at the point services are needed. The POS also allows you to opt out of network entirely for even lesser benefits, but at least you will have coverage if you must choose a non-network provider.
An indemnity plan is commonly known as a fee-for-service or traditional plan. If you are insured by an indemnity plan, you have the ability to choose any licensed health care provider. You do not need referrals or authorizations, but some plans may require you to pre-certify for certain medical services. Most indemnity plans require you to pay a deductible. After you have paid your deductible, indemnity policies typically pay a high percentage of “usual and customary” (UCR) charges for covered services. Most plans have an annual out-of-pocket maximum and once you’ve reached it, they will pay 100% of all charges for covered services. Most insurance companies no longer offer indemnity plans so you may have few or no indemnity plan choices in your area.
A provider is a hospital, health care facility, physician or other medical professional that provides health care services.
A PCP is a physician or other medical professional who serves as a member’s gatekeeper or first contact within a managed health care system. The PCP will oversee all services provided to the plan member, and should be contacted first (except in emergency situations) when medical services are needed.
A co-payment is a flat dollar amount that you pay for a particular service.
Co-insurance is a percentage of the fees that you have to pay for particular services. Typically the coinsurance you will have to pay is between 10 to 20% for in-network services, and 30 to 50% for out-of-network services. The insurance company pays the remainder of the fees.
A deductible is the amount of calendar year medical expenses that a health plan member must pay before the plan will begin to cover expenses. Certain services (such as a physician’s office visit co-pay) will not be subject to the deductible. Co-pays may or may not count toward the deductible. Generally speaking, if your plan has a $500 deductible, you will pay the first $500 of your medical expenses before your health plan begins paying the expenses. Only expenses for covered services apply toward the deductible. For example, if you paid $100 for a visit to a chiropractor but the plan does not consider chiropractic care a covered expense, then the $100 will not apply toward your annual deductible.
Usual & Customary (also referred to as Usual, Customary & Reasonable, or UCR) is the average fee for particular medical services that is charged by providers. These average fees, or UCR amounts, are typically determined by the Health Insurance Association of America. Generally speaking, a health insurance plan’s out-of-network and/or indemnity benefits will be capped based on UCR amounts for a particular geographical area. For the purpose of an example, assume your PPO health plan pays 90% for in-network services and 70% for out-of-network services. Let also assume that you go to a non-PPO (out-of-network) provider and that provider charges $600 for a particular service. (Let’s also assume that you have already fulfilled your annual deductible). When you submit the $600 claim to the insurance company, you expect to be reimbursed 70% of $600 or $420. Well, maybe not. If the non-network provider charged $600 for what should have been a $500 charge based on what is UCR, then the insurance company will only reimburse you 70% of $500 ($350) and you would be responsible for the remainder of the fees.
Similar to the UCR policy explained above, some health plans will cap what they reimburse for out-of-network services based on the low negotiated fee schedule they have with their in-network providers. For example, assume your PPO health plan pays 90% for in-network services and 70% for out-of-network services, but caps out-of-network reimbursements to never exceed in-network fee schedule charges. Let’s also assume that you go to a non-PPO (out-of-network) provider and that provider charges $600 for a particular service. (Let’s also assume that you have already fulfilled your annual deductible). When you submit the $600 claim to the insurance company, you expect to be reimbursed 70% of $600 or $420. Well, maybe not. If the non-network provider charged $600 for what should have been a $400 charge based on the network’s limited fee schedule, then the insurance company will only reimburse you 70% of $400 ($280) and you would be responsible for the remainder of the fees.
An in-network medical provider is within the approved network of providers for a particular managed care health plan. Out-of-network providers are not on the list of network providers (however, they may be members of other managed care networks). If you receive services from a doctor within the network, the amount you will be responsible for paying will be less than if you go to an out-of-network doctor. In most cases, HMOs provide no out-of-network benefits. Plus, all care must first be initiated by a PCP (or primary care physician). In general, HMOs tend to have smaller provider networks than PPOs. Indemnity plans typically do not have networks, so you go to whatever licensed doctor you want.