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Health Insurance Basics

Getting the most from your benefits

Few individuals could handle a large financial loss due to a catastrophic illness or injury on their own. However, when you purchase health insurance, you take an important step in reducing this risk for you and your family. To further reduce your personal liability, it’s important you understand how your health insurance coverage works before you or your family need to use it.

Basic Terms

DEDUCTIBLE: You pay 100% of the costs for covered services subject to the deductible. This is the amount you pay before the insurance company begins paying their portion of Co-Insurance.

CO-INSURANCE: The percentage of covered charges you pay for the calendar year after your deductible has been met. For example, with 80/20 coinsurance, the insurance company pays 80% of the discounted covered expenses and you pay 20%.

DISCOUNT AMOUNT (Contracted or Allowed amount): Certain health care providers (doctors and hospitals in your network) offer reduced charges to policyholders. The insurance carrier subtracts the appropriate discount amount from the provider’s billed amount and processes the claim based on the policy terms.

OUT-OF-POCKET MAXIMUM: The total amount you pay in deductible and co-insurance/co-payments that accumulate toward your out-of-pocket cost for the calendar year. Typically In-Network and Out-Network totals accumulate separately. Once the out-of-pocket max is met, the insurance company pays 100% for In-Network covered services for the rest of that calendar year. Keep in mind, Out-Network charges may still be balanced billed by the provider to you after your Out-Network out-of-pocket is met.

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PPO: (Preferred Provider Organization) Insurance carriers contract with providers and hospitals to be a part of their network. When a provider contracts with an insurance carrier, they agree to certain terms in which they must abide by. Within those terms, the provider must only charge the "Allowed Amount" or sometimes referred to as the "Contracted" or "Discounted" amount. This is the first level of financial protection a PPO policy provides. After any applicable deductibles are met, your co-insurance is then based on this contracted amount NOT the original amount the provider bills. PPOs may have a larger network statewide and across the country when compared to an HMO or EPO.

Staying in the carrier's PPO network is essential to protecting your wallet.

HMO:  (Health Maintenance Organization) HMOs often require members to select a primary care physician (PCP), a doctor who acts as a "gatekeeper" to direct access to medical services but this is not always the case. PCPs are usually internists, pediatricians, family doctors, or general practitioners (GPs). Except in medical emergency situations, patients need a referral from the PCP in order to see a specialist or other doctor, and the gatekeeper cannot authorize that referral unless the HMO guidelines deem it necessary.

HMOs typically have lower out of pocket cost as you will find that you pay a flat co-pay ($) for most services rather than co-insurance (%).

EPO:  (Exclusive Provider Organization) EPOs are basically a combination of both the PPO concept and HMO concept. While you are not required to select a primary care physician or obtain referral to see specialists just as the PPO works, there are no benefits for out of network services much like an HMO.

Typically an EPO provides deeper discounts for members but the trade off is the restrictions in the network. Key point here is to familiarize yourself with the providers in the network proactively.

Things to consider before using your plan

Your Health plan includes benefits that help you stay healthy. Most individual major medical plans include immediate coverage for preventive services recommended by the Patient Protection and Affordable Care Act (health care reform) when received from an in-network provider. Taking advantage of the preventive care benefits offered by your plan will help you maintain your health.

  • Maximize your benefits by using a participating network provider. When you do, you won’t be responsible for cost-sharing requirements of your plan, like deductibles and coinsurance.

  • Please note that while a number of preventive services are paid at 100%, other charges related to those services, such as office visit and physician fees, may not be.

Your health plan will look at the procedure code your provider entered to determine cost-sharing requirements.

If you have a PPO (participating provider organization) network plan, choosing in-network providers (doctors and hospitals) gives you the most value for your health care dollar.

  • In-network providers have agreed to reduce the amount they will charge patients in the network — meaning you’re eligible to receive discounts.

  • Your deductible, coinsurance and out-of-pocket limit are at their lowest when you use network providers.* (You’ll find your plan deductible, coinsurance and out-of-pocket limit in the Benefit Summary section of your insurance contract.)

Authorization might be required

Authorization — advanced review of planned treatment — is required before inpatient treatment, outpatient surgery and other types of invasive outpatient treatment listed under Utilization Review in your insurance contract. When authorization is required, ask your health care provider to initiate the process as soon as possible prior to the beginning of treatment.

Emergency surgery or hospital admission should never be delayed for authorization. However, your health care provider should call the authorization contact number as soon as possible during/following such emergency care.

ER vs. Urgent Care?

Many people think of the emergency room as their "Go To" place for medical care when their normal doctor is not available. It's not uncommon to hear things like "I waited 5 hours to be treated" or "The medical bill was OUTRAGEOUS!"... Many times you hear things like this because the emergency room was truly designed for treatment of extreme medical situations that threaten the loss of "life or limb". Typically resulting in hospital admission after the patient has been stabilized.

For less threatening medical needs its recommended that you seek an urgent care facility in your plan network. If you're unsure, did you know most health plans have a 24 hour nurse line that you can consult? They will help determine if your symptoms are severe enough to appropriately visit your nearest ER or if an urgent care facility will be your best source of care. They can even help you find one in your network to ensure you maximize your coverage.

Using your prescription drug benefits

Prescription drug claims are discounted and processed immediately when you:

  • Visit a participating pharmacy

  • Present your insurance card along with your prescription(s)

  • Make sure your prescribing physician submitted the proper pre-authorization(s)

You can save on the retail cost of prescription drugs when when staying in-network (if you are subject to a deductible). When you pick up your prescription, any drug discount will already be applied. Your pharmacist will charge you any amount you’re responsible for paying (e.g., your copay, any applicable coinsurance or deductible). For details on your plan’s coverage of generic and brand prescriptions, see the Prescription Drug information in your insurance contract or call us.

If you have monthly maintenance prescriptions, you may want to utilize your policy "Mail Order" benefits. Many carriers offer discounted co-pay amounts for 3 months at a time via mail order pharmacy benefits.

Specialty drugs, such as injectables, typically go through a specialty pharmacy - not a retail pharmacy. Check with your plan to make sure you utilize one in the plan network for the most coverage.

Filling a prescription without your insurance card

Without your insurance card, the pharmacy will charge you the retail price for your prescription drug. However, you can submit your receipt and a claim form to have the claim applied to your plan.

Tips for keeping more money in your pocket

Knowing what you’re spending and keeping an eye on costs are important parts of keeping health care affordable. Here are a few things you can do to make a difference:

  • Visit PPO network doctors and hospitals to avoid out-of-network costs.

  • Present your insurance card each time you visit a healthcare provider or pharmacy to ensure you’ll receive all available discounts.

  • Ask your doctor to prescribe FDA-approved generic prescription drugs, when available, instead of more expensive name brands.

  • Ask your doctor for prescription drug samples

  • Follow your doctor’s orders. According to the Merck Manual of Medical Information, one in ten hospital visits each year results from not following instructions for taking medicine.

  • Research cost and quality data before you agree to any expensive test or treatment.

  • Avoid emergency rooms for non-emergencies. Know in advance the locations of the nearest urgent care, retail health and after-hours clinics.

  • Review all medical bills for accuracy and ask about any costs that you don’t recognize or understand.

  • Always ensure that your claims are submitted promptly. Even if your deductible is not met, you may qualify for a discount.

Call or email us directly to discuss your specific situation.

-Be Well