Health Insurance has changed drastically over the past 30 years and has become more of a luxury than a given. With the country in an economical recession, employers are looking to make cuts and unfortunately, health insurance with its high premium costs are the first to go. But even with cuts, health insurance companies are offering more and more options to their plans. So what do they all mean?
In general, health insurance can be broken up into 4 categories: Traditional Indemnity plan (often called fee-for-service plans); PPO or Preferred Provider Organizations; POS or Point-Of-Service plans; and HMO or Health Maintenance Organizations.
A Traditional Indemnity Plan or Fee-For-Service (FFS) plan is probably an option that is not as well publicized as the other plans on the list. They do not have a contracted network of health care providers; instead, they decide on a set amount that they will pay for each service. The way the plan usually works is that a patient may have a procedure done at the hospital that costs $2000. The FFS might only reimburse for $1500 of that procedure. That means the patient is responsible for the remaining $500 plus whatever may be charged for any doctors or office follow-up visits. The plan does allow for a lot of flexibility to see whatever doctor or specialist the patient would like to see, the downside is that the cost could become drastically higher than being with one of the other 3 plan options.
Choosing the Preferred Provider Organization (PPO) as your health insurance option allows you the flexibility to receive medical treatment ‘in network’ (a database of doctors already preauthorized to treat you as a patient for a fixed cost determined by the doctor’s office and the health insurance company) for a fixed fee or ‘out of network’ (not under the rules above) for a higher premium cost. PPO’s are also more flexible and do not require a Primary Care Physician.
The Point-of-Service (POS) plan is a cross between the PPO plan and the HMO plan. Like an HMO plan, a POS plan requires that you have approval from a Primary Care Physician before seeing a specialist and will cover almost all charges as long as you choose someone with the network of prescribed doctors. But similarly, the POS plan is also flexible like the PPO plan in that you can choose to see a doctor out of network for usually a small co-pay or fee.
And a HMO or Health Maintenance Organization is a form of health insurance where the hospital and health care provider will work out an agreement to provide the most affordable form of insurance to the insurer. HMO companies work with hospitals and doctor’s offices to outline the specifics of what they will and won’t pay for services rendered– with no exceptions. For this reason, persons with HMO coverage must only use doctors and hospitals ‘in-network’ to receive treatment or they will be charged fully for the services provided. HMO patients must also have a Primary Care Physician approval before having any specialist treatment.
Different companies and different employers may offer variations on these 4 categories, so it is important to fully read your health insurance options before choosing the one that is best for you and your family. Remember to contact your benefits representative in your office to ask any questions, question charges from procedures or medical bills, and voice any concerns you have about your current coverage. Also ask scenario questions about each of the health care options available to you. What you would if, what do you do when, who do you contact if ….. It is important to know the in’s and out’s of your policy before something happens so you can be prepared for what to do next. Also, keep a paper-copy of your policy available if ever needed in case of emergency.
Each year companies have the option to change or maintain the same plan structure, so speak up if you feel something could better benefit you and your fellow employees.
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