If you are a worker bee, like the majority of Americans who have health insurance, your workplace picks a plan and you just basically go with the flow; if you’re lucky, the plan includes dental and optical as well, and, if you really lucked out, there is a disability policy in place for you too.
If, however, you are a single subscriber because you are in business for yourself, or have lost your job and must obtain health insurance, there are wide range of options out there to choose from. In the past, if you couldn’t afford it, you might have gone without health insurance, but, since the advent of the Affordable Care Act (“ACA”) or “ObamaCare”, it is the law that you must have health insurance in place or pay a fine.
Below are some salient points to help you muddle through understanding the various types of insurance – remember that you can always make it easy on yourself, by consulting with someone whose skill and expertise in the insurance field will make the choices easy for you to understand – such a person would be John Savadjian, an insurance broker in New Jersey. A top insurance broker like John Savadjian can go over all of your insurance needs with you and can help you choose the best plan for the best price.
Understanding the difference between a PPO, HMO and an EPO
You might have heard this lingo bandied about – PPO, HMO and EPO, but would do those acronyms signify? Do you already know, or do you need to Google to find out that a PPO is a Preferred Provider Organization, an HMO is a Health Maintenance Organization and an EPO is an Exclusive Provider Organization. It really is confusing, so let’s start by going…
Back to basics
An indemnity plan is sometimes referred to as “fee-for-service” plan, a type of insurance that has been in existence, long before HMOs and PPOs arrived. They are the most-flexible type of health insurance option available today because these plans aren’t tied to a provider network like their managed care counterparts tend to be – you are free to go to whatever doctors, hospitals, and other facilities you prefer, and, best of all, you never need a referral to see a specialist. The only downfall is that you must satisfy a deductible before the insurance begins to kick in, and, in most cases, you will be responsible for a co-insurance or “co-pay” which will come out of your pocket. Additionally, an indemnity plan does not usually cover preventive care (birth control and flu shots are two good examples), and, on occasion will not cover prescription drugs either.
A managed healthcare plan has more options, so here you will be able to choose an HMO, PPO or EPO as referenced above.
A description of this trio of options is as follows:
Exclusive Provider Organization (EPO) is the most restrictive of the managed-care options, as you’ll have to use the physicians, specialists, hospitals, and other facilities within the EPO’s approved network of providers if you want the care you receive to be covered by insurance. The difference between an EPO and HMO is that you won’t be forced to find and name a primary care provider as part of an EPO plan, and, usually, if you go out-of-network for health or medical assistance, you probably will not be reimbursed, except in the case of emergencies.
Health Maintenance Organization (HMO) is healthcare where you have a primary care provider and this will be a physician that will manage the majority of your healthcare needs. Any referrals to specialists must be done through your primary care physician and you will go to a physician, and have all tests or lab work done by those personnel that are in the network. Emergency treatment is sometimes accepted if out of the network and an HMO will consent to pay for all, or some, of your treatment for an emergency situation. Another benefit is the monthly premium is lower, as is the deductible and co-pay.
Preferred Provider Organization (PPO) is a health insurance policy that allows for a bit more freedom than the EPO and HMO plans, because you are free to seek assistance out of your network, without a referral, though you’ll pay for those costs out of pocket. While your insurer will usually pay 80% of your in-network costs, they will only pay 60% of out-of-network costs.
Point of Service (POS) plans are worth mentioning because they combine the best of HMO and PPO plans, and, since you are free to roam to medical personnel or facilities out of your network, you will be reimbursed for same, though the downfall is that you, the insured, will probably have to pay a deductible and higher copay in such situations. Smaller costs will result by getting a referral from your primary care provider for that out-of-network assistance, thus the reward for that is your POS plan may pay all or some of the resulting costs.
Key to understanding ObamaCare
All those above choices are great, but, if you opt for ObamaCare, here are your options, whether you go through the federal or one of the state-based health insurance marketplaces (a/k/a “exchanges”) that have been created as a result of the Affordable Care Act. Before entering any of the sites to choose your healthcare coverage, you should be aware of the “metal levels”, a different strata named for a precious metal that signifies each type of coverage
The various categories delineate how comprehensive your plan is and how your healthcare costs will be shared:
- Bronze – If you select a plan in this “metal level”, you’ll probably have to pay about forty percent of the costs (which includes monthly premiums, deductibles, copays, coinsurance, and out-of-pocket limits) related to the care you receive.
- Silver – Here, this “metal level” plan will pick up, on average, seventy percent of your healthcare fees, leaving you to pay for the remaining thirty percent.
- Gold – Selection of this strata of metal plans, has you bearing responsibility for only twenty percent of your health and medical bills.
- Platinum – This plan is “deluxe” and will pay approximately ninety percent of your healthcare costs.
- Catastrophic – This particular type of plan is to afford protection to people who are younger than thirty years of age, or who have been given a “hardship exemption” from worst-case scenarios and the sky-high medical costs associated with them. The premiums are the lowest of all types of coverage, but will not cover all your costs either.
Coverage for specific situations
If you desire insurance that will cover specific ailments, diseases, or healthcare settings or situations, many plans, policies, or even just options will fit the bill. They might include the following categories:
Accident only – this type of insurance policy will cover death, dismemberment, or disability as a result of an accident. This encompasses hospital stays or other medical care and treatment that are usually associated with an accident. Make sure your insurance broker explains the terms of this coverage with you.
Disability income – this type of insurance coverage provides payments, typically on a weekly or monthly basis, if a covered injury or illness disables you in some way and you can no longer do your job. But, be aware that there are different disability insurance policies; for some, you may receive income if you can no longer do your job and must stay at home, but for other policies, you may be forced to take another job that you are capable of doing – read the fine print always!
Hospital only – this type of policy is pretty explanatory and depending on the specifics of the policy you choose, your hospital stay and associated costs will be taken care of. Again, you need to read the fine print, because some of these “hospital confinement” policies require that you stay at least one night in a hospital before you can receive a benefit; other policies are more lenient and will allow you to receive a benefit even if you have an out-patient procedure, or even a skilled nursing facilities or home care.
Long-term care – this is an insurance policy which will help to ease the costs if an accident or illness force you to be placed into an assisted living or skilled-nursing facility or providing for at-home assistance for a long period of time. It is good insurance coverage to have for an extended care” situation.
Medicare supplemental – is considered a “gap” insurance policy for people who are receiving their healthcare through Medicare because they are either 65 years old or are younger than 65 years of age and receiving Social Security disability.
Specified disease – is an insurance policy which covers the diagnosis and treatment of a specifically named disease, like cancer.
Of course, separate insurance should be purchased that is pertinent to coverage for your dental and optical needs.
Hopefully, this primer on the types of insurance coverage available to you has been helpful, so that when you are ready to pick your policy, a consultation with an insurance broker here in New Jersey, like John Savadjian, will help streamline the process for you.