Even though health insurance is something that is part of most people’s lives, many do not fully understand it. This can cause confusion and make it hard to understand if you have the best policy or not. In this article, we will go over four common health insurance questions to help clear up the confusion surrounding health insurance.
What is the Difference Between an HMO and a PPO?
HMO and PPO refer to the way that the insurance company organizes its providers. HMO stands for Health Maintenance Organization. HMOs have a network of doctors and hospitals that you must use to receive coverage. You must choose a Primary Care Physician or PCP. If you want or need to see a specialist, you must first get a referral from your PCP to do so. Failing to get a referral could cause a gap in coverage.
On the other hand, are PPOs, or Preferred Provider Organizations. These typically have large networks of doctors and facilities for you to choose from. You can see any doctor within that network for full coverage. Specialists do not require referrals to see. If you go to a provider out of network, your coverage will be reduced.
What is a Deductible?
When shopping for an insurance policy one of the first numbers you will want to look at is your deductible. This is the amount you will have to pay before your insurance company will start covering costs. For example, if your plan as a $5,000 deductible you will have to pay $5,000 in services before coverage kicks in. However, not all services will require you to meet the deductible before being eligible for coverage, like doctors’ visits. It is important to note that the higher your deductible is, the lower your monthly premium is and vice versa. You will need to weigh the costs of both and find which type of plan fits your budget.
What is the Difference Between Co-Insurance and Co-Payment?
There are two different way insurance companies split the cost of coverage with you. With co-payment plans, there are set fees you pay for each type of service you receive. For example, you might have a $30 co-pay for doctor’s visits, a $500 co-pay for ER visits, and a $100 co-pay for x-rays. There is a list of fees for each service in your policy documents.
With co-insurance plans, the cost is split between you and the insurer with set percentages. Typically, these will be represented as 70/30, 80/20, or 90/10. The first number is the percentage the insurer will pay. The second number is the percentage you will pay. This coverage will only kick in after you meet your deductible.
What Does Out-of-Pocket-Maximum Mean?
Your out-of-pocket-maximum is a set amount, it is the most you will pay for medical services in your policy period. Once you hit this number, which is usually large, your insurance company will pay 100% of medical costs until your policy period restarts. This is in place to help limit your medical spending each year.
Understanding Your Policy
The answers to these common health insurance questions should help you to understand your policy better. If you are unsure of your coverage, or you are having a hard time shopping for a new policy, meet with a qualified insurance agent who can help you. Having the best health insurance for your budget is very important and can help to reduce large unexpected medical bills.
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