Health insurance plans can be complex mechanisms that provide a wide range of services but are limited by numerous exclusions. As a consumer, you should know how to take advantage of the full scope of your benefits. Understanding your plan can help you make informed, cost-effective decisions in pursuing medical services. Many denials or other adverse decisions by health insurers result from a consumer not knowing how their plan works.
For example, you may want to make sure to choose a doctor who is in your network, or you may need to get a referral from your primary care physician to get coverage for a visit to a specialist. Before undergoing a surgery, you may need to get prior authorization from your insurer to have it fully cover the costs. If you file a dispute with your insurer, moreover, you will want to meet all of the deadlines and procedural requirements that apply. (Read more here about these disputes.)
Types of Health Plans
Most plans are classified as either PPO or HMO. A PPO plan is a preferred provider organization plan. Doctors and hospitals in its network provide health care services for a lower price, and the plan pays for the vast majority of the costs. You can use doctors outside the PPO network, but you will need to pay more for their services. Both copayments and deductibles apply in this plan. By contrast, an HMO plan is a health maintenance organization plan. This involves paying a flat fee as a member of the plan in exchange for receiving health care services from doctors and other providers. If you are enrolled in an HMO, you will need to pay copayments but not deductibles.
There are also still traditional plans known as fee-for-service plans. They allow a patient to receive care from virtually any doctor, hospital, or other provider in most cases. Once you pay for the medical service, you can complete a claims form to be reimbursed by the insurer.
If you are self-employed or have chosen your own health insurance plan, you will be responsible for paying your own premiums. This means that you are self-insured and will need to handle any disputes with the plan on your own.
Meanwhile, employer-sponsored health plans come in two forms. You may have an insured plan through your employer, which means that your employer has purchased insurance from a third party or an HMO. Or you may have a self-funded plan through your employer, which means that the employer will cover your health care costs independently instead of contracting with an insurance company. However, an employer with a self-funded plan still may retain the services of a health insurance company to administer the plan. The title of the plan may bear the name of the administrator, which can mislead an employee into thinking that it is an insured plan. To know for sure, you should ask the person at your company who is responsible for handling benefits whether a plan is insured or self-funded.