What Types of Health Insurance are Out There?

Let Virginia Medical Plans help you make the best choice!

How will you make the best choice for your health insurance?  By understanding your options!

Here is a high-level review of the different types of health insurance plans.  The right fit is different for each individual.  So please give our office a call to discuss which type of plan may be best for you!

Health Maintenance Organizations (HMOs) and Exclusive Provider Organizations (EPOs)

Coverage is limited to a certain list of providers (called the network).  This means you can only go to a doctor, clinic, hospital, or other medical provider that is part of the plan’s network.  If you visit an out-of-network provider, you will be responsible for the full charge.

With an HMO plan, your care is coordinated through a primary care physician who must give you a referral to visit a specialist.  This is not true for EPOs.

You may be charged a co-payment for certain services.

Preferred Provider Organizations (PPOs) and Point-of-Service plans (POS)

These types of plans give you a choice of provider, but certain providers are within the plan’s preferred network.  You will pay more for service if you visit an out-of-network provider.

With a PPO, you may visit any doctor without a referral.  With a POS, you may visit any in-network doctor without a referral, but must have a referral to see someone out-of-network.

Co-payments and co-insurance are common for these plans.

High Deductible Health Plan (HDHP)

HDHPs typically allow treatment by both in-network and out-of-network providers, with the deductible for out-of-network care being higher — and tracked separately — than the deductible for in-network care.  Co-payments also will differ for in-network vs. out-of-network care.

Click here for a full description of HDHPs.  If you have a HDHP, you can use a Health Savings Account (HSA) to lower your costs.

Catastrophic Health Insurance Plan

A catastrophic health insurance plan covers essential health benefits but has a very high deductible.  It really serves as a “safety net” for a major medical event.  Premiums may be very low, but you may pay thousands of dollars before your coverage kicks in.  On the exchange, catastrophic plans are only available to people under age 30 and some with low income.

Virginia Medical Plans Can Help!

Again, this article provides only a high-level explanation of health insurance types.  There are many more details that should factor into your decision of which plan is the best choice for you.  Please give us a call!

Health Insurance Glossary

Shopping for health insurance?  Deciphering the costs and provisions of the various plans out there can be very confusing.  Here are some key terms that will help — whether you’re selecting a new plan or just trying to figure out your existing one.

Quick-Reference Guide to Health Insurance Terms

Allowed Amount – (also known as eligible expense, payment allowance, or negotiated rate) Your health insurance company has negotiated a pre-agreed rate schedule for services provided by its preferred (or in-network) providers. The allowed amount is the agreed-upon charge for a particular service.

Balance Billing – When a provider (out-of-network) bills you for the difference between the provider’s charge and the allowed amount.  An in-network provider (or preferred provider) may NOT balance bill for covered services.

Co-insurance – Your share of the costs of a covered health care service, calculated as a percent of the allowed amount for the service.  For example, if your plan is an 80/20 plan, this means that the insurance company will pay 80% and you will pay 20%.  Your share of the co-insurance for out-of-network care is higher than in-network.

Co-payment – A fixed amount (example, $15) you pay for a covered service, usually at the time of service.  The co-payment amount can be different for different services.

Deductible – The amount you pay for covered health care services before your health insurance begins to pay. Not all services may count toward your deductible.  Out-of-network deductibles are higher than in-network deductibles.

Maximum out-of-pocket – the most you pay during a policy period (typically one year), after which your health insurance pays 100% of the allowed amount.  This limit does not apply to premiums, balance-billed charges from out-of-network health care providers, or services that are not covered by the plan.

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Let’s consider a scenario to show how health care costs are shared between you and your insurance company.  Suppose your health plan has the following:

• Deductible:  $1,500
• Co-Insurance: 80/20
• Maximum out-of-pocket: $5,000

Suppose your first medical expense of the policy year is a visit to the doctor.  The allowable charge is $125.  Because you have not met the deductible, you pay the full $125, insurance company pays $0.

As the months go by, you see the doctor several more times, fill prescriptions, and pay for other covered services that cause you to reach your $1,500 deductible.  Now, co-insurance kicks in.

Your next covered medical expense (eg., doctor visit, prescription, etc), will be paid 20% by you, and 80% by the insurance company.

This 80/20 split continues until your total expenditure reaches $5,000.

At this point, you have reached your out-of-pocket maximum.  All of your covered health care expenses will be paid 100% by the insurance company (and you will pay $0) for the rest of the policy year.

It is important to keep in mind that some plans have separate deductibles, co-insurance, co-payment, and other limits for in-network vs. out-of-network providers.  Be sure you know your plan’s rules!

Confused?  Give us a call.  We’ll help you figure it out!