Health insurance can be complicated and confusing. The premise behind it, however, is fairly straightforward. We can’t foresee what accidents or illnesses may be in our future, so to be prepared for unexpectedly large medical bills, we pay into an insurance plan each month. In return for paying that monthly premium, we have insurance coverage when faced with an unplanned emergency.
That’s how it’s supposed to work, but the reality of health insurance varies a lot. Some insurance plans provide better coverage than others but may be more expensive. In some cases, an insurance company may not pay for a medical treatment or prescription, even if your doctor believes it is necessary.
Many insurance plans have “open enrollment” toward the end of each calendar year, which is an opportunity for people to update their insurance coverage and in some cases, change plans altogether. Now is a good time to review your health insurance and determine if you are getting the coverage that works best for you and your family.
The world of insurance has its own lingo, so you’ll want to familiarize yourself with the various terms you’ll see when evaluating your options:
- HMO: Health Maintenance Organization. HMOs are insurance plans in which enrollees can only see providers who are part of the HMO’s network. A visit to an out-of-network provider will not be covered, except in cases of medical emergency or if the insurer has agreed in advance that it is a medical necessity.
- PPO: Preferred Provider Organization. This type of health insurance plan does permit enrollees to see out-of-network providers, though usually at a greater out-of-pocket cost. There are also fewer restrictions on seeing specialists without a referral from your primary care doctor.
- EPO: Exclusive Provider Network. This plan has some characteristics of both HMOs and PPOs. As with an HMO, there is generally no coverage for out-of-network providers. But like PPOs, EPOs do not require you to first get a referral from a primary care doctor before seeing a specialist.
- In-network: Insurance plans have a group of health care providers that they refer to as a network. These are providers – physicians, hospitals, labs – with which the insurer has a contract that governs what the provider will be paid by the insurance company. The bottom line for the patient is that it’s cheaper to see a doctor or go to a hospital that is in-network. Sometimes, however, it is not always practical (see the next definition).
- Out-of-network: This refers to providers who are not in your insurer’s plan. You may pay more to see providers who are out-of-network. Some patients will choose to see a provider out-of-network if they believe that’s the best healthcare available for their situation. In other instances, such as a medical emergency, it may not be practical to get to an in-network provider.
- Premium: This is the amount you pay each month to maintain your health insurance coverage.
- Deductible: This is the amount of money you pay out-of-pocket before your insurance company begins to pay your claims. It is generally a fixed dollar amount each calendar year.
- Co-pay/co-insurance: This is the amount you pay at each visit to a healthcare provider. Sometimes this is a fixed dollar amount and in some cases, a percentage of the total bill. There are co-pays for visiting your doctor, a specialist, getting an x-ray, having lab work done, filling a prescription, getting hearing aids, using an ambulance and going to an urgent care clinic or emergency room.
- PCP: This is the abbreviation for primary care provider, which is usually a family doctor or doctor of internal medicine. PCP is an important term for insurance purposes; your insurance company will want to make sure you have one and will sometimes require a referral from your PCP before you can see a specialist.
- EOB: This is the “explanation of benefits” your insurer will send you after you’ve used your health insurance. The EOB will explain what the total charges were, how much your insurance covered and what amount, if any, you may still owe the provider later on. The EOB is not a bill.
Prior Authorization: In some cases, you or your physician may need to obtain prior authorization for a medical procedure, screening or prescription drug. In these cases, the procedure or prescription in question may not automatically be covered and your provider (or you) has to explain to the insurance company why it is medically necessary and why it should be covered.
Where do you get health insurance?
People obtain health insurance in a variety of ways:
- Your employer: This is the traditional way most non-seniors in America have health insurance. You select a plan your employer offers and your premium is deducted each month from your paycheck (before taxes). Generally, the employer pays a share of the employee’s coverage and in some cases, a share of the employee’s family members’ coverage.
- The Health Insurance Marketplace: The Marketplace was established by the Affordable Care Act and is an option for American citizens under 65 to purchase health insurance. People generally use this option if coverage is not available through their employer. Some plans have low premiums and high deductibles, which could make sense for younger, healthy people who don’t have a lot of medical needs. Other plans are more expensive but cover more, which makes sense the older you get. Some enrollees may qualify for a federal income tax credit when they enroll, depending on income. Open enrollment in the Marketplace runs from November 1 to December 15, 2017. Visit www.healthcare.gov for more information.
- Medicare: This is the federal health insurance program for American citizens age 65 and older. People who are approaching the age of 65 should visit Medicare.gov for enrollment information. Some people are automatically enrolled at age 65 while others need to enroll themselves. There are three main components of Medicare:
- Medicare Part A is known as hospital insurance, covering hospital stays and some long-term care needs.
- Medicare Part B is medical insurance, covering physician visits and medical screenings and labs.
- Medicare Part D is a prescription drug insurance program.
Some people choose to delay enrollment in Medicare Parts B and D if they have health insurance through an employer that they prefer to keep while they are still working. However, a late enrollment penalty may apply.
- Medicare Advantage: These are private plans that some seniors choose to purchase to supplement the coverage provided by Medicare.
- Veterans Administration: Veterans of the United States Armed Forces may be eligible for varying degrees of health benefits through the VA, depending on a variety of factors, including the length of time served, discharge circumstances, income and service-connected disability. For more information, visit VA.gov.
- Tricare: Tricare is health insurance for active-duty military personnel, as well as some military retirees. For more information, visit Tricare.mil.
- Medicaid and CHIP: Medicaid and the Children’s Health Insurance Program (CHIP) primarily serve lower-income families. In Texas, Medicaid eligibility is usually limited to children and expectant mothers. CHIP is available for some families who earn too much to qualify for Medicaid but whose children are uninsured. Visit www.healthcare.gov or the Texas Health & Human Services Commission.
One of the most important things when picking a health insurance plan is to verify that your physician (or the one you would like to start seeing), as well as any specialists you may need to visit, are in-network. This will reduce your out-of-pocket costs considerably, both in terms of deductibles and co-pays. Texas Health Care/Privia North Texas providers are in-network with most major insurance plans in North Texas.
After that, the type of plan you select will depend on where you are in life and what you think your health care needs will be. If you’re relatively young and healthy and don’t anticipate visiting a doctor often, a higher deductible in exchange for lower premiums may make sense.
How Do Insurance Networks Work?
All insurance plans, including HMOs, PPOs, and EPOs, are required to maintain adequate networks for their customers. Each state has the primary responsibility of regulating health insurance, so network adequacy in Texas is regulated by the Texas Department of Insurance (TDI).
There are several requirements that insurers must meet when it comes to network adequacy in Texas. These are a few of the most important, according to TDI:
- “These plans must provide a network with enough qualified doctors and hospitals to make sure that covered services are reasonably available and that you have choice, access, and quality care.
- General doctor and hospital care must be available within 30 miles (within 60 miles in rural areas for PPOs and EPOs).
- Network specialty doctors and hospitals must be available within 75 miles.
- Emergency hospital care (including general, specialty, and psychiatric hospitals) must be available 24 hours a day, seven days a week.
- Nonemergency urgent care must be available within 24 hours for medical and behavioral health conditions.”
If you believe your insurance provider is not meeting these or other requirements, you can file a complaint with TDI. (Note: TDI regulates the private health insurance market in Texas and does not have jurisdiction over Medicare, VA, Tricare or most aspects of the Health Insurance Marketplace).
At the Doctor’s Office
When you make an appointment to see a doctor for the first time, you will give the office staff your insurance card and they will verify your coverage is active. You may also have filled out an information sheet before your visit. The doctor’s office will collect any co-pay you owe for the visit. After your visit, the physician’s office will bill your health insurance provider directly. You will later receive the EOB from your insurer, explaining what they covered for the visit. If there is an amount that you still owe the provider (or in some cases, a separate lab), you will receive a bill directly from the provider later on.
“Health insurance can be confusing and even overwhelming at times, says Dr. Jason Ledbetter. “At Texas Health Care/Privia North Texas, each provider’s office does its best to facilitate insurance benefits on behalf of our patients. Since we’re in virtually all of the major insurers’ networks, that’s a big advantage for both our patients and our physician members.”