PPO plans (Preferred Provider Organizations) are what most people have become familiar with. Especially when offered through a group/employer plan. However, what we have been finding is that many self-employed individuals are paying very high premiums for low deductible medical insurance, and they are still not covered very well! This is probably a carry over from group plans.
I thought that going through some facts about major medical and explaining the different products available might make the whole process of being insured easier. Don’t you agree that education is a great tool?
Let’s start with products. What is the difference between an PPO, an HMO, and an HSA?
Preferred Provider Organization (PPO) plan is a form of managed care that closely resembles an indemnity plan. A PPO negotiates arrangements with doctors, hospitals, and other providers of care who will accept lower fees from the insurer for their services. As a result, your cost sharing will be lower than if you were to seek care outside the network of providers.
If you go to a doctor within the PPO network, you will typically pay a copayment. In addition your coinsurance will be based on the lower charges for PPO members. For example, the insurer may reimburse you for 80% of the cost if you go to a provider within the network. If you choose to go to a provider out of the network, the insurer may only reimburse you for 70% or so of the cost. Also, with an out-of-network provider, you may have to pay the difference between what the provider charges and what the plan will pay.
What is a HMO?
HMO stands for Health Maintenance Organization. With an HMO, you need to choose a Primary Care Physician that is within your health plan’s network. If you need to see a specialist, your PCP will have to give you a referral if the health plan is to cover the cost.
When you choose a PCP, it’s a good idea to ask about hospitals and specialists with which he or she is affiliated. You can find out more about a particular doctor, including his or her credentials, by contacting your health plan, either directly or via the Web, or by calling the doctor’s office.
HSA is a Health Savings Account. As of January 1, 2004, healthcare consumers have a new way to help manage their own healthcare. Health Savings Accounts (HSAs) provide consumers with added insurance coverage and control. Flexibility is the key component of an HSA. Anyone with a high-deductible health plan can set up a health savings account to save money on medical care now, as well as save for future medical expenses. You may use HSA funds to pay for expenses that must be met before your deductible, to pay for services not covered by your health plan (such as alternative therapies or out-of-network providers), or insurance coverage during periods of unemployment. The HSA is basically an account that you set up at your favorite local bank (returns are generally about 2%) and you can make tax-deductible deposits into the account. Which grows tax deferred. And you can make tax free withdrawals for medical expenses. In 2010 the amount you can put in for singles is $3050.00, and for a family it is $6150.00. You don’t have to put all the money in. You can have $5o.00 in the account. But my big question would be, why? Assets accumulate year to year without loss. To find out more about HSA qualified expenses check IRS Publication 502. The really other great thing about HSA’s is after the deductible is met you can have 100% coverage. No coinsurance, no co-pays’s. 100% coverage. And did I fail to mention all of the tax advantages?
A few more terms to understand:
What is a deductible?
A set amount of money that you pay each year for certain kinds of medical services before your health insurance coverage begins to pay for covered services. Insurers may have more than one deductible within a plan design. For example, a plan may have a prescription drug deductible as well as one for durable medical equipment. Often times on a family plan there is a separate deductible for each member of the family. Ouch!
What is coinsurance?
Coinsurance is a fixed and pre-determined percentage of covered medical charges that you are responsible for paying. The coinsurance amount will be specified in your schedule of benefits. One example of coinsurance would be: your health plan covers 80% of certain medical charges, and you are responsible for the remaining 20%. On each and every service. AFTER your deductible is met.
What is a copayment?
A copayment is a fixed amount you pay each time you receive a covered service, such as a doctor’s office visit, a prescription, day surgery, or if you are admitted as an inpatient.
How does this all of this work for you?
I work with all the major plans in Texas. I will review your individual circumstances, look at all of the different plans, identify the best plan for you and then help you complete the application and get you set up in underwriting. Finally, I am there to make sure the policy gets issued in an acceptable manner.
You can go to my web site; http://www.jglassinsurance.com for a partial listing of my major medical offerings and to view quotes!