Understanding Various Health Plans
There are many plans to choose from for your health insurance needs, and most come with a three letter acronym (TLA). Acronyms are helpful for insurance companies when communicating internally, but they can be a bit confusing for the rest of the world. At Network Health, we speak your language. That’s why we’re breaking down the many plan options and just what they mean to the consumer.
Let’s start with the plans referred to as Exclusive Provider Organizations or EPOs. These plans generally have a network of providers that you need to use unless it’s an emergency. Going outside of this network for care usually results in the medical bills not being covered. These plans generally do not require you maintain a primary care provider (PCP) and don’t need referrals. This narrower choice of physicians usually results in a savings either in lower monthly premiums or copayments. This happens because the doctors and providers are willing to offer deeper discounts to join the exclusive list of providers.
Health Maintenance Organizations or HMOs are plans most people are familiar with. With these plans, you need to see in-network providers unless it’s an emergency. You must also pick a family doctor and get a referral to see a specialist. By adding these extra limitations, the costs can be controlled and generally member cost shares can be reduced further. Both choices are great for providing low-cost quality coverage, especially if you can choose a plan with the popular provider groups you are probably already using like Froedtert Health or Ascension.
Instead of lower costs, some consumers would prefer more flexibility in their choice of providers. That’s when a Point of Service (POS) rider may be added to an HMO plan. It keeps the requirements to maintain a PCP and to get referrals, but this rider allows you to see an out-of-network provider under certain conditions such as when you get a referral by an in-network provider. While the claims or bills may be covered, you will still usually have a slightly higher cost seeing out-of-network providers.
Preferred Provider Organization or PPO plans go further yet and maintain the ability to see in- and out-of-network providers but usually without needing a referral or requiring you to maintain a PCP. This great flexibility in choice and simpler rules comes with costs though, and these plans tend to be a little more expensive than HMO and EPO plans.
The last designation you may commonly hear about is a Health Savings Account (HSA) or Health Reimbursement Account (HRA). Medicare also has a special version called a Medical Savings Account (MSA). Each of these plans are typically a savings account combined with a high-deductible insurance plan which could be any of the plan choices above. The rules between an HSA and HRA differ a little, but both give you an account like a checking account that can be used to pay medical expenses. Usually your employer or insurance company will add a certain amount of money into the account and you may be allowed to add your own tax-free contributions as well.
While you may have a larger deductible to meet before your insurance starts to cover most services with an HSA or HRA plan, you are a partner in how your money is spent and may even get to keep some of the savings from your good decisions.
With an HSA plan, the money that is placed in the bank account is yours even if it is not used at the end of the plan year. If you have a good year or make careful decisions on how to spend your health dollars, you may have money left over at the end of the plan year which you can roll over into the next year or take with you if you change plans. With an HRA the money usually stays with the employer funds if you leave the plan or employer.
Medicare Advantage plans also have their own version of these plans, the MSA. These plans, like our NetworkPrime plan, tend to work like an HSA plan and at the end of the year you may have funds left over that you can keep with you even if you do not stay with the plan. There are rules on how the money can be spent in all three of these plans and using it on non-medical expenses could result in a tax penalty on the money used or may not be allowed at all depending on the plan.
There are many plans to choose from for your health insurance needs. Understanding your options is the first step in making the right choice for you.
For more help understanding health insurance, visit the insurance translator on our website at networkhealth.com/understanding.