What kind of insurance plan do I have?

There are many insurance plans that are on the market today.
Prior to 1997 most everyone in our local area had an indemnity insurance plan. This plan is a traditional fee-for-service coverage. With this plan a patient would pay their premiums. They could go to any healthcare provider for services and the insurance company would pay the full amount that the provider charged for the service. There are still some of these plans in the market today. Many of these plans have changed and added deductibles and coinsurance responsibility to the patients.

Things started changing in the healthcare market and insurers started to make a network of healthcare providers for their patients. Insurers approached healthcare providers to become an in-network provider with their organization. The insurance company would send patients to an in-network provider and the in-network provider agreed to bill the insurer and accept a discount for payment of services.

This arrangement supported the creation of our many healthcare plans of today. The following are the most common:

Preferred Provider Organization Plan(PPO): This plan gives a patient the flexibility of choosing services with any healthcare provider (similar to an indemnity plan) or the choice to see an in-network provider. There is a financial incentive to use an in-network provider. Some of these incentives are lower deductible, lower co-insurance or less out of pocket expenses. If you choose an out-of-network provider a patient may be required to pay the healthcare provider directly for services. The patient would then submit the bill to their insurance company and the insurance company would pay the patient less any deductibles, co-insurance, etc. (You should always call your healthcare provider’s office so you may be informed of their policies and procedures.)

Point of Service Plan (POS): This plan offers the flexibility of a PPO product with a managed care product. A patient has the option to go to any in-network provider for services (such as a PPO plan) or they may choose to utilize a primary care provider (PCP) and operate this plan as an (HMO). For this plan a patient will pick a PCP and then they can either go through their primary care for all services and be referred (referral) to another healthcare provider as an HMO product. Or a patient may self-refer and choose to see any healthcare provider in the insurance network. If a patient self-refers they will usually have a higher patient financial responsibility in their co-payment’s, deductible’s, etc. It is very important to understand with this type of plan if you choose a healthcare provider that is not in the insurance network, the insurance usually will not pay for your services unless you received prior authorization from your insurance company. If you wish to seek an out-of-network provider for your health services, always call your insurance company before any service is rendered to request an out-of-service authorization. Understand that if your insurance company does not authorize your service you will be responsible for all charges. NOTE: Some states have legislation, which will allow some services to be accessed without a referral process. For example, in the state of New Hampshire a patient can self-refer and does not need a referral for a gynecological yearly exam or for obstetrical (pregnancy) services. (Check on your state guidelines and your insurance company’s state affiliation.)

Health Maintenance Organization (HMO): For this benefit a patient has to pick a PCP. The PCP coordinates all the patient’s healthcare needs. If a patient is to see another provider such as a specialist, or if they were in need of special services such as physical therapy, it would have to be requested by the primary care provider. Your insurance company would have to approve the requested services for payment to be made by them. It is very important to understand with this plan all services need to be approved and referred by your PCP. A patient does not have the choice to self-refer with an in-network or out-of-network healthcare provider unless it falls under certain legislation. If a patient self-refers to either an in-network or out-of-network provider the service usually is the patient’s financial responsibility. NOTE: Some states have legislation, which will allow some services to be accessed without a referral process. For example, in the state of New Hampshire a patient can self-refer and does not need a referral for a gynecological yearly exam or for obstetrical (pregnancy) services. (Check on your state guidelines and your insurance company’s state affiliation.) You may also call your insurance company for a list of their self-referred authorized services.

Allowable Charge- The maximum fee that a third party will reimburse a provider for a given service

Co-Pay- A fee charged to members by their insurance company for certain services, such as office visits, drug prescriptions, etc.

Coinsurance- A percentage of the costs for services

Deductible- A fixed amount of money that a person must pay before the insurance pays for any health care

Indemnity Insurance- Traditional fee-for-service coverage in which providers are paid according to the service performed and charges that are submitted

HMO (Health Maintenance Organization)- A managed care product in which a patient must coordinate all health care services through their in-network primary care provider

Network – A defined group of providers, typically linked through contractual arrangements to an insurance company

Out of pocket expense- A dollar amount that a patient is expected to pay to share in the cost of her healthcare

PPO (Preferred Provider Organization)- A managed care organization that has a preferred provider network

POS (Point of Service) – A managed care product with the option to seek services with an in-network provider or to coordinate all healthcare services through their in-network primary care provider

PCP (Primary Care Provider)- Usually a family or internal doctor which is picked by a patient to coordinate her healthcare

Referral – A recommendation by a physician or managed care plan for a patient to be evaluated or treated by a different physician or specialist

Usual and Customary Fee – An amount of money determined by the insurance company that they will pay for services received by a patient

This information is not intended to give the specific detail of any insurance plan. This information is provided as a simplified overview of various common insurance plans. You should notify your employer or your healthcare insurance company to gather more detailed specifics regarding your individual insurance policy.