Health Plan Info
Insurance coverage is a key concern for patients and their families, yet understanding the details of a patient’s plan can be difficult and confusing. Each plan varies in the depth and range of coverage it provides for care and it may change from year to year. Below is a list of various types of plans and a description of the terminology used. We are participating providers for a variety of managed health care plans and insurance carriers.
Health Maintenance Organizations (HMO’s): HMO’s are organized systems for providing health care in a specific area. They follow a basic and supplemental preventative and treatment services; members generally select a primary care physician who is responsible for making all referrals to specialists. HMO’s offer no “out of network” benefits and have low out-of-pocket (co-pay) expenses.
Indemnity Plans: Indemnity or traditional insurance is not considered “managed care”. In indemnity plans the member chooses his or her own providers. Oversight of care by the health plan is minimal. The member’s out-of-pocket payment is generally a percentage of the providers “usual and customary” fee schedule.
Managed Care: A program designed to manage the cost and quality of health care. Ideally, managed care brings about a comprehensive health care system where patients receive the care they need, including preventative care when they need it. The plans vary from restrictive provider panels and low out of pocket amounts to fairly open provider panels and high out of pocket amounts.
Medicare: The federal health insurance program for older Americans and eligible disabled individuals. Medicare HMO’s are being offered in some areas of the country, including California.
Point of Service (POS): POS plans build on the HMO concept. However, if a member chooses to seek a specialist directly, without a referral from their PCP, or seeks an “out-of-network” provider, they will have coverage with a higher out-of-pocket (co-insurance) amount.
Preferred Provider Organization (PPO): PPO’s generally provide “in-network” and “out-of-network” benefits and do not require a PCP referral to see a specialist. The amount the member must pay out of pocket is less when using an “in-network” provider.
Co-payment: A flat fee paid out of pocket for medical services, at the time the service is rendered. Usually applies to physician office visits, prescriptions, emergency or hospital services.
Co-insurance: Coinsurance, like co-payments, is a common form of member cost-sharing, typically applied as percentage of applicable costs after the deductible requirements are met. With traditional non-managed care plans, the percentage is based upon provider charges, sometimes up to a maximum allowable amount per service. In managed care plans, the percentage can be based upon provider contract rates.
Deductible: The amount of medical expense a person must pay each year from his/her own pocket before the health plan will make payment.
Gatekeeper: When a primary care physician, the “gatekeeper”, serves as the patient’s initial contact for medical care and referrals.
Out of Network Benefits: PPO’s and HMO Point of Service plans contain an out-of network benefit tier that is different from benefit coverage for network services. In PPO plans there can be cost sharing requirements that are somewhat “hidden” in the process. For example, a number of PPO plans indicate a percentage coinsurance requirement for out-of-network, but also limit the benefit to a maximum allowable based upon average contract rates. This means the member must pay a percentage coinsurance based on the maximum allowable, plus the entire amount that exceeds the maximum.
Primary Care Physician (PCP): A PCP is a physician designated as responsible for providing specific primary care services. This includes evaluation and treatment of a patient, including decisions regarding referral for specialty care. PCP’s are generally in family practice, general practice, general internal medicine, pediatrics and sometimes obstetrics and gynecology. Under the HMO health plan model, the PCP may also be considered the gatekeeper.