Understanding Coverage

Coverage is what the health plan does and does not pay for. Coverage includes: benefits, deductibles, premiums, limitations, etc.

Although the same benefit may be included in each health plan, it may be paid at a different benefit level. For example, emergency care is a benefit common to most plans, however, one plan may pay for 100% of emergency care cost, while some plans may cover 80% of the emergency care expenses, while others 50%.

There are four basic types of health plans available to people who do not receive Medicare or Medi-Cal. A basic understanding of each is essential to choosing the one that works best for you.

Use the Tips below to assist you in your selection process:

• Indemnity Insurance
• Health Maintenance Organization (HMO) and Exclusive Provider Organization (EPO)
• Preferred Provider Organization (PPO)
• Point of Service (POS)
• How to Choose Coverage
• Choosing Your Doctor
• Sample Situations
• Frequently Asked Questions
  

Indemnity Insurance

Also called Fee-For-Service
You are probably most familiar with this traditional insurance coverage. It pays for most of your expenses resulting from illness or accident, but does not usually pay for preventive care, such as well-child visits and physical exams.

Indemnity insurance doesn't cover the total cost. Coverage is usually limited to a percentage of the billed amount and only begins after you've met your deductible, which is a yearly, fixed amount of expenses. Under an indemnity plan, you can see any doctor or hospital you want, but the monthly premium is usually higher than other types of health plans.

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Health Maintenance Organization (HMO) and Exclusive Provider Organization (EPO)

Health Maintenance Organization
An HMO covers most of your health care needs, including checkups, immunizations and hospitalization, for a small co-payment, typically between $5 and $40. There are no claim forms with an HMO; however, you can only go to doctors and hospitals affiliated with your plan. A list of affiliated physicians is provided by the HMO.

EPO (Exclusive Provider Organization)
An EPO functions in much the same way as an HMO but is even more exclusive.

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Preferred Provider Organization (PPO)

Preferred Provider Organization
PPOs cover many of your health care needs for a small per-visit fee if you choose from the list of preferred providers. You can choose to see a doctor who is not on the list, however, you will be responsible for a greater portion of the bill and may have to pay a deductible. Some PPOs do require claim forms.

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Point of Service (POS)

Point of Service
A POS plan offers you two choices each time you use health care services. One choice is to use the plan as an HMO in which case you are responsible for a nominal co-payment; you must choose your physician from a list of participating physicians; and you must obtain authorizations for certain services and referrals to specialists. Your other choice is to use your health plan like an indemnity plan by choosing care from either a participating or non-participating provider, without coordinating care through your primary care physician or health plan. In this choice, you are generally responsible for a deductible and a percentage of your bill.

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How to Choose Coverage

It takes time to find a plan that fits your needs, and many plans have pre-existing condition exclusions. Be sure to think ahead.
Are you planning a family?
Will you need surgery soon?
Will you be moving out of the area?

Coverage Through Your Employer/Your Spouse's Employer
If you or your spouse is employed and want to change plans through your employer, ask when the next open-enrollment period will occur. For the peace of mind that you've chosen the plan that's right for you, allow yourself two months to research your various options.

If your employer doesn't provide health insurance, you'll need to focus on health plans that offer insurance to individuals. You might also investigate associations that offer members the opportunity to join a health plan.

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Choosing Your Doctor

Good health plans start with the doctor. The first step in choosing a health plan that's right for you is choosing a doctor who's right for you. If you have a doctor you like, find out the plans in which he/she participates.

Special Medical Needs
If you regularly see a particular cardiologist, allergist or any other specialist, you may want a plan that lets you continue doing so without a referral. (This is especially true when choosing an HMO, which may require an authorization to see certain specialists.) Lastly, think of the hospitals and health facilities you like.
Do certain facilities specialize in medical areas that are of particular importance to you?
Is one facility more convenient than another?
Find out which hospitals are affiliated with which plans.

Ask for an insurance brochure for each plan you're interested in.

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Sample Situations

You're single, you earn a good wage, and (lucky for you) you're the picture of perfect health.
Since you rarely see a doctor, your best bet is to choose a plan with a low monthly premium and a higher co-payment. But you should also look for a plan with good coverage in areas that are important to you, such as routine physicals and emergency care.

You have a family of four and your oldest is about to start kindergarten.
You will soon be seeing a pediatrician more than you see some friends. You'll want a plan with low co-payments because those visits will really add up. Immunizations, check-ups and prescriptions should all be covered expenses. If you already have a pediatrician you like, choose a plan with which he/she is affiliated. You'll also want to make sure a participating urgent care center and hospital are nearby.

You're married and planning a family.
You need a health plan with good maternity and well-child care. Maternity care should include prenatal, delivery and nursery care that begins at the moment of birth. Ideally, you should also plan for unforeseen circumstances like emergency Caesarean section and infertility problems. Well-child care will be important to monitor the progress of your healthy baby until 2 years of age. Routine checkups and immunizations should be part of the coverage. Look for a plan with low co-payments since you'll be seeing your doctor a lot.

You’re a 40-50 year old with a modest monthly income.
You have just been diagnosed with a knee problem for which you must undergo ongoing treatment. You'll need a health plan that lets you see the specialists you want as often as you want. You'll be taking prescriptions, so you'll want to make sure those are covered expenses. Since your income is modest, low co-payments are important. You may pay a higher premium to get the coverage you want, but the advantages will be worth every cent.

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Frequently Asked Questions

Before you start reading the insurance brochures, take the time to make a list of questions regarding the issues that are important to you. If you can't find the answer, or you don't like the answer you get, move on to another brochure.

Q. Can I see my own primary care physician and specialists?
A. Different types of plans have different rules about which doctors you can see. If you can't find the answer in the insurance brochure, request a list of participating doctors. Before you sign up with any plan, ask your doctor if he/she is still affiliated with that plan and can refer you to the specialist of your choice.

Q. If you have an ongoing health problem or condition, how will the plan cover it?
A. Some plans let you see specialists (like orthopedists or allergists) as often and for as long as you want. Others require an authorization that is based on the referral being medically necessary, according to your primary care physician's judgment. If you take medications, prescription coverage is important. Some plans also have different pre-existing condition restrictions. Read the fine print.

Q. Is maternity care covered?
A. Check your plan for coverage of routine checkups, screening tests, and prenatal educational classes.

Q. Does the plan cover preventive care for my children?
A. Plans vary in the coverage of periodic physicals, immunizations and school physicals.

Q. Do I have to fill out claim forms?
A. As a general rule, when receiving covered services, HMOs do not require you to complete claim forms. For Point of Service (POS) and PPO plans, when you visit participating providers and have obtained necessary authorizations, claim forms are not generally required. Indemnity plans usually require you to do the claim form paperwork.

Q. Is the least expensive plan always the best buy?
A. First, start with a plan that offers coverage to match your needs. All else being equal, only then should you consider the cost. You'll need to look at the monthly premiums versus out-of-pocket costs (deductibles and co-payments) to determine what will cost you the least as you use services during the year.

Q. How can I minimize out-of-pocket expense and maximize coverage to receive the highest level of benefits available?
A. HMO, PPO and POS plans are generally less costly. Within those plans you can minimize out-of-pocket expenses by selecting participating providers and by obtaining referrals and authorizations when necessary.

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