Health care terms in the US are used all the time. Have you ever stopped to ask yourself what they really mean? I know I have! Reading Healthy Women this week, I dug into an article by Deb Gordon first before attempting to write for you all today.
Remembering back to when I started working, I was fortunate to have the benefit of health care insurance with my job. I was young, healthy and didn’t give much thought to it, I was happy knowing I could go for exams and have help paying for the visits.
As I progressed through life, I’ve learned to check with providers about the terms, billing and services in greater detail. As many are confirming their choices for 2023, it seemed like a good time to review what terms mean to plot out the year ahead!
Costs to Expect in your Plan
Monthly premium The monthly cost you pay for health insurance coverage.
Deductible. The amount you have to pay out of pocket before your health insurance starts paying for any services you use. If you get healthcare services before you’ve met your deductible, you’ll usually have to pay 100% of the cost, even for services that are covered by insurance.
Copayment (Copay). Are set fees you pay each time you go to an appointment. Sometimes copayments (Copays) are expected when you book your appointment online, arrive for your appointment, or might be billed later. Copayments can vary depending on the type of healthcare provider (HCP) you see (e.g., a primary care physician (PCP) vs. a specialist) or type of service (e.g., emergency room vs. office visit).
Coinsurance. The percentage of healthcare costs that you have to pay once you’ve met your deductible. For example, if you have 20% coinsurance for hospital services and you get a $10,000 hospital bill, you’ll be expected to pay $2,000.
More Lingo! Terms to Know
In-network providers. Many health plans have a set of health care providers (HCP’s) under contract. The HCP’s who contract with the plan are called “in-network.” *This is very important during hospital stays. All providers may not be “in network” who are assigned to you throughout your stay.*
Out-of-network providers. Health care providers (HCP’s) who do not participate in a health plan’s network are considered “out of network.” Check carefully on your plan, out-of-network providers may be covered at lower rates than in-network providers. Some plans do not offer coverage for out-of-network providers at all, which means you’d pay 100% of the cost to see them.
Out-of-pocket maximum. After you’ve spent money on your deductible, copayments and coinsurance, there’s a limit to what you’ll have to pay out of your own pocket each year. This limit is called the “out-of-pocket maximum.” Once you’ve reached this amount, you cannot be charged additional fees for covered services from in-network providers. You can still be charged for care you get from out-of-network providers or for services that are not covered. Monthly premiums do not count toward your out-of-pocket maximum.
Referrals. In some health plans, you have to get a referral (be given “permission” to see) specialists or other health care providers (HCP’s) for certain services. Referrals are written orders from your primary care provider (PCP).
Prior authorization. To receive certain services or prescriptions, some plans require you to get authorization in advance (prior authorization, pre-approval). Check if your health care provider (HCP) will submit forms to your insurance provider on your behalf, or if this is something you need to handle before seeking the service. If you don’t get prior authorization for services that require it, the health plan can deny your claim and you could be left paying for 100% of the service yourself or you may be denied the test/services.
Open enrollment. Open enrollment happens yearly for you to sign up for health insurance or switch plans. The open enrollment time varies by company for job-based insurance and for different programs such as Medicare or the Health Insurance Marketplace. Outside of the open enrollment period, you cannot switch plans unless you have a change in life circumstance, called a “qualifying life event,” that allows you to have a special enrollment period.
Special enrollment period. If you have a change in circumstance, (qualifying life event) you may qualify for a special enrollment period. That means that you can sign up or switch insurance outside of an open enrollment period. Circumstances that might qualify you for a special enrollment period include changes in family structure (i.e., having a baby, getting married or divorced, moving or losing job-based benefits.
High-deductible health plans. High deductible health plans (HDHP’s) are plans with high deductibles. This means the amount you pay out of pocket before your health insurance starts covering services is higher than a typical amount. The threshold for an HDHP changes each year. For 2023, an HDHP is any plan with a deductible of at least $1,500 for an individual or $3,000 for a family. The maximum out-of-pocket expenses are $7,500 for an individual and $15,000 for a family.
Health savings accounts. Health savings accounts (HSA’s) are savings accounts that let you use tax-free dollars for qualified healthcare expenses. HSAs are often paired with HDHPs to help you pay healthcare costs before you meet the deductible. The balance in your HSA is yours, so unused amounts roll over and can build up over time.
Types of Plans
There are three main types of health plan in the US.
Health maintenance organizations (HMO’s). HMO’s often have the lowest monthly premiums, yet can be the most restrictive. In an HMO, you must have a primary care physician (PCP) and get referrals from that PCP to see specialists. An HMO only covers services you get from HCP;s who participate in their network. Outside of that network, HMOs don’t usually cover any costs unless it’s an emergency.
Preferred provider organizations (PPO’s). PPO’s tend to have higher monthly premiums than HMO’s because they give you more flexibility. PPO’s don’t require a member to have a primary care physician (PCP) or get referrals to see specialists. Like HMO’s, PPO’s have a network of contracted HCP’s. Check the plan to learn what the costs you are required to pay to see HCPs outside of the plan’s network.
Point-of-service (POS) plans. POS plans are like a cross between HMO’s and PPO’s. POS plans may require you to have a primary care provider (PCP) and to get referrals before seeing specialists. POS plans have contracted networks of HCP’s, but may allow you to see HCP’s outside the network for a higher cost. POS premiums typically fall between HMO’s and PPO’s.
Year-end Review
Pay attention to the details. Boy, they can come back to haunt us when you need something the most.
If you’d like help in reviewing what you have n place and what’s missing, reach out. Send me a note at: Lynn@thelivingplanner.com or call/text my office +1951.400.5966 to reach me.
My main website is: https://thelivingplanner.com Check out my online courses/resources to assist people, pets and businesses here: https://courses.thelivingplanner.com
Enjoy this quote by ~ John Wooden. “It’s the little details that are vital. Little things make big things happen.” — Lynn
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