Health Insurance: Your Questions Answered
What is managed care?
Managed care is a health care system in which your primary physician acts as the gatekeeper for other specialized medical services. There are three main types of managed care.
- Preferred Provider Organization (PPO): The main concept behind a PPO is the network. If you opt for this type of insurance, you may choose any health care provider from within your network, determined by your policy, or any non-network health care provider. You are usually required to make a co-payment or pay co-insurance. Staying in-network saves you a bundle with the PPO!
- Health Maintenance Organization (HMO): Like the PPO, the HMO requires you to make a co-payment to an in-network physician. However, an HMO will not pay for services you receive outside the network. Your primary care physician acts as the gatekeeper to your health care. In order to obtain specialty care, you must attain a referral from them.
- Point of Service (POS or Open Access HMO): This health insurance plan is similar to the HMO. However, you can go out of network. But the plan usually only reimburses you 50 to 80 percent, and you may be required to pay co-insurance and a deductible.
Is managed care the only type of health care system?
No. Over the last decade, the cost of health insurance has inflated considerably. The government responded by creating the Health Savings Account (HSA), which is a consumer-driven health-care system. The HSA pairs with a High Deductible Health Plan (HDHP).
The health care consumer puts tax-exempt money into the savings account. When they require medical care, they use the money in their account to pay for it. If the cost of service exceeds the deductible of their HDHP, the insurance company pays the excess.
The HSA could save you money because you only pay if you seek care. However, if you have a health condition or accident-prone children, this type of policy may end up costing you.
What is an out-of-pocket limit?
After you spend a certain amount on covered medical services, including your co-payments and deductibles, your insurance company pays the rest of your medical expenses for the remainder of the year.
What is a lifetime maximum?
Your plan only pays a certain amount for medical care you receive throughout your lifetime. This amount varies depending on your plan. This is especially important to know if you or a family member suffers from an ongoing medical condition.
What are exclusions and limitations?
Depending on your policy, some services are not included, like cosmetic dentistry or mental health care. And some items are limited, such as the length of time you can stay in the hospital. You are responsible for those things excluded or limited by your plan.
How often do rates change? Do they increase as I get older?
As you age, you're at higher risk for certain health conditions. For example, men are more susceptible to prostate cancer after age 55. Insurance underwriters take those types of statistics into account. Asking questions and understanding how they determine your health ranking is the best way to ensure you get a fair price. Conditions like high cholesterol or blood pressure used to guarantee a higher insurance rate. But because of medical advances, that is no longer the case.
Does health insurance pay for prescriptions?
In many cases, you will make a co-payment for prescriptions. Depending on your plan, certain types of prescriptions may not be covered, such as oral contraceptives or hormone replacements.
Are there waiting periods before certain treatments are covered?
Some policies have waiting periods before they make payments on any health care you receive. Others have waiting periods before you can receive treatment for pre-existing conditions. It varies, so it's important to find out before committing to a plan.