‘Tis the season when leaves are falling, the air is becoming brisk, and summer is a thing of the past (unless you happen to live near us in beautiful Oceanside, CA ;-) ). As we prepare for the holiday season, we must remember what is important in life… choosing the health insurance plan that will allow you to receive the best care next year, of course.
Okay, perhaps this is not the most exciting topic to be thinking about this time of year, however, it is an important one to consider as we are now deep in open enrollment period. So, Pipeline PT is here to help you understand the wide variety of insurance plans available so you can make a smart and informed choice based on your needs. Scroll down for the basic terminologies you will see and some useful tips.
What is a Premium?
This is the monthly payment you make to your insurance carrier to be covered. Many places of employment cover part or all of this payment, then deduct the remainder from your paycheck. Typically, the higher the premium payment, the lower your financial responsibility when you use medical care.
What is a Deductible?
A deductible is a set annual amount that you, the subscriber, must pay in medical bills before your health insurance carrier contributes towards your bills. After you have met your deductible, you are only responsible for your copay or coinsurance for covered services.
For example, if you have a deductible of $500, your insurance carrier will typically not pay any portion of your medical bills until you have paid $500 out of your own pocket.
Usually, a lower deductible will be associated with a higher monthly premium.
What are Copays and Coinsurances?
These terms both refer to the portion of medical treatment that the subscriber is responsible for paying after the deductible has been met. A copay is a nominal, known dollar amount that is paid up front at each medical treatment. A coinsurance is a percentage of the cost of the treatment, usually determined after the insurance carrier has processed the visit.
Higher premiums usually come with lower copays and coinsurances.
What is an Out-of-Pocket Max or Catastrophic Cap?
This is the point when you usually no longer must pay towards your covered medical bills until the end of the year. Once all out-of-pocket payments towards your deductible, your copays, and coinsurance payments have added up to this dollar amount, your insurance should pay for 100% of your covered medical expenses. Just like the deductible, a lower out-of-pocket max usually comes with a higher premium.
Can you explain how networks work?
An insurance network includes all healthcare facilities and providers that are contracted with a particular insurance carrier. For example, at Pipeline PT we are in-network for many private PPO insurance plans, Medicare, Tricare, VA, and some worker’s compensation companies. This means we have contracted rates with these carriers and are able to accept and submit bills for treating patients with these insurance plans when treatment is medically justified.
Some private insurance plans also cover services for providers that are not in their network or “out-of-network”. Treatment provided by out-of-network providers often comes with a different deductible, copay/coinsurance, and out-of-pocket max. Sometimes these benefits are the same as their in-network benefits. And some plans do not allow out-of-network benefits at all. You can search through your plan benefit package to verify if you have in- and out-of-network benefits. Our wonderful office staff may also provide a courtesy check on this for you if you ask politely .
HMO vs PPO:
These are the two basic types of networks (although there a few more complex types within these categories).
HMO plans tend to be more restrictive with a more narrow set of providers you can see than PPOs. You typically have a primary care physician that must refer you to specialists with approval and authorization from your insurance carrier. HMO plans typically do not allow you to see providers outside of your specific network.
PPO plans allow more freedom to see any type of provider directly without referral (although some plans still may require one). PPO plans may also provide out-of-network benefits allowing you to see out-of-network providers. This type of plan is less restrictive on who you can be treated by.
POS plans are somewhere in the middle. They provide similar benefits to a PPO, however, certain preferred providers contracted to your specific plan will reduce you cost sharing responsibility.
That was a lot of exciting information!!! But it is barely the tip of the iceberg on the complexities of health insurance coverage in America. Therefore, below I have added a few helpful tips to think about as you choose your plan:
- A higher monthly payment usually leads to reduced costs when you use medical providers. It is important to do the math when choosing a high or low premium plan, taking into account the deductible, copay/coinsurance, out-of-pocket max, and how often you use the medical field. A lower monthly premium may make sense for those that do not see the Doctor much, but remember when you do go, your bill will probably be higher. Conversely, if you do utilize the medical field often, a higher premium may reduce your per visit cost.
- Check which networks your providers of choice belong to. If you select an HMO plan which your favorite provider is not a part of, it is unlikely your insurance will pay for your visits to that provider and you will have to pay cash, out-of-pocket. A PPO plan will allow you to see most providers depending on their network participation and your in- and out-of-network benefits.
- Choosing a plan with good in-network and out-of-network benefits allows much more freedom to see the provider you prefer.
- Make sure the services you use most often are covered under your plan. For example, there are still some plans out there, although rare, that do not cover Physical Therapy services.
Hopefully this information was helpful in allowing you to make an informed choice about your health insurance needs for the upcoming year. If you have questions about coverage at Pipeline Physical Therapy, our office staff are always happy to assist in verifying and explaining your benefits and estimated costs. Don’t hesitate to ask!
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