Health Insurance
This collection of personal financial information is directed to works for a
living. Everyone needs to know more about financial matters. The SOURCE
for much of this information is the GSA Consumer Information Catalog published
by the Federal Citizen Information Center.
Checkup on Health Insurance Choices
Today, there are more types of health insurance, and more choices, than ever
before. The information presented here will help you choose a plan that is right
for you. You may be buying health insurance for the first time, or you may
already have health insurance but want to consider changing plans. Married or
single, children or no children, this information will help you to find out how
to choose a health insurance plan that best meets your needs and your
pocketbook. Definitions of the health insurance terms used are included in the
section called Understanding Health Insurance Terms.
Contents
Thinking About Health Insurance Choices
Which of these statements best describes your thoughts on health insurance?
"I get health insurance through my job. I have the coverage I need...
I think"
Many employers offer a choice of plans. The information provided will help
you figure out the plan that's best for you.
"I know I need health insurance, but I'm not sure how to get the best
protection at the lowest cost."
You're not alone. Many people have questions about how to select a health
insurance plan. The information provided will help you find some answers.
"I can't afford health insurance right now. I have too many bills to
pay and other things I need to buy."
Health insurance is one of your most important needs. Without it, one
serious illness or accident could wipe you out financially. The information
provided will help you decide which is the best plan you can afford.
Why Do You Need Health Insurance?
Today, health care costs are high, and getting higher. Who will pay your
bills if you have a serious accident or a major illness? You buy health
insurance for the same reason you buy other kinds of insurance, to protect
yourself financially. With health insurance, you protect yourself and your
family in case you need medical care that could be very expensive. You can't
predict what your medical bills will be. In a good year, your costs may be low.
But if you become ill, your bills could be very high. If you have insurance,
many of your costs are covered by a third-party payer, not by you. A third-party
payer can be an insurance company or, in some cases, it can be your employer.
Where Do People Get Health Insurance Coverage?
Group Insurance
Most Americans get health insurance through their jobs or are covered
because a family member has insurance at work. This is called group insurance.
Group insurance is generally the least expensive kind. In many cases, the
employer pays part or all of the cost.
Some employers offer only one health insurance plan. Some offer a choice of
plans: a fee-for-service plan, a health maintenance organization (HMO), or a
preferred provider organization (PPO), for example. Explanations of
fee-for-service plans, HMOs, and PPOs are provided in the section called Types
of Insurance.
What happens if you or your family member leaves the job? You will lose your
employer-supported group coverage. It may be possible to keep the same policy,
but you will have to pay for it yourself. This will certainly cost you more than
group coverage for the same, or less, protection.
A Federal law makes it possible for most people to continue their group
health coverage for a period of time. Called COBRA (for the Consolidated Omnibus
Budget Reconciliation Act of 1985), the law requires that if you work for a
business of 20 or more employees and leave your job or are laid off, you can
continue to get health coverage for at least 18 months. You will be charged a
higher premium than when you were working.
You also will be able to get insurance under COBRA if your spouse was
covered but now you are widowed or divorced. If you were covered under your
parents' group plan while you were in school, you also can continue in the plan
for up to 18 months under COBRA until you find a job that offers you your own
health insurance.
Not all employers offer health insurance. You might find this to be the case
with your job, especially if you work for a small business or work part-time. If
your employer does not offer health insurance, you might be able to get group
insurance through membership in a labor union, professional association, club,
or other organization. Many organizations offer health insurance plans to
members.
Individual Insurance
If your employer does not offer group insurance, or if the insurance offered
is very limited, you can buy an individual policy. You can get fee-for-service,
HMO, or PPO protection. But you should compare your options and shop carefully
because coverage and costs vary from company to company. Individual plans may
not offer benefits as broad as those in group plans.
If you get a noncancellable policy (also called a guaranteed renewable
policy), then you will receive individual insurance under that policy as long as
you keep paying the monthly premium. The insurance company can raise the cost,
but cannot cancel your coverage. Many companies now offer a conditionally
renewable policy. This means that the insurance company can cancel all policies
like yours, not just yours. This protects you from being singled out. But it
doesn't protect you from losing coverage.
Before you buy any health insurance policy, make sure you know what it will
pay for...and what it won't. To find out about individual health insurance
plans, you can call insurance companies, HMOs, and PPOs in your community, or
speak to the agent who handles your car or house insurance.
Tips when shopping for individual insurance:
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Shop carefully. Policies differ widely in coverage and cost. Contact
different insurance companies, or ask your agent to show you policies from
several insurers so you can compare them.
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Make sure the policy protects you from large medical costs.
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Read and understand the policy. Make sure it provides the kind of
coverage that's right for you. You don't want unpleasant surprises when
you're sick or in the hospital.
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Check to see that the policy states: the date that the policy will begin
paying (some have a waiting period before coverage begins), and what is
covered or excluded from coverage.
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Make sure there is a "free look" clause. Most companies give
you at least 10 days to look over your policy after you receive it. If you
decide it is not for you, you can return it and have your premium refunded.
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Beware of single disease insurance policies. There are some polices that
offer protection for only one disease, such as cancer. If you already have
health insurance, your regular plan probably already provides all the
coverage you need. Check to see what protection you have before buying any
more insurance.
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What Are Your Choices?
There are many different types of health insurance. Each has pros and cons.
There is no one "best" plan. The plan that's right for a single person
may not be best for a family with small children. And a plan that works for one
family may not be right for another.
For example, if your family includes just two adults, it may be less
expensive for each of you to have individual coverage than for just one of you
to have a family plan. If you have children, or if you might have children soon,
you need a family plan. Because your situation may change, review your health
insurance regularly to make sure you have the protection you need.
Choosing a health insurance plan is like making any other major purchase:
You choose the plan that meets both your needs and your budget. For most people,
this means deciding which plan is worth the cost. For example, plans that allow
you the most choices in doctors and hospitals also tend to cost more than plans
that limit choices. Plans that help to manage the care you receive usually cost
you less, but you give up some freedom of choice.
Cost isn't the only thing to consider when buying health insurance. You also
need to consider what benefits are covered. You need to compare plans carefully
for both cost and coverage.
Although there are many names for health insurance plans, the information
here groups them as three main types:
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Fee-For-Service (or Traditional Health Insurance).
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Health Maintenance Organizations (or HMOs).
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Preferred Provider Organizations (or PPOs).
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Which Type Is Right for You?
For each group, choose the statement 1 or 2 that best describes how you
feel:
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Having complete freedom to choose doctors and hospitals is the most
important thing to me in a health plan, even if it costs more.
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Holding down my costs is the most important thing to me, even if it
means limiting some of my choices.
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I travel a lot or have children that live away from me and we may need
to see doctors in other parts of the country.
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I do not travel a lot and almost all care for my family will be needed
in our local area.
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I don't mind a health insurance plan that includes filling out forms or
keeping receipts and sending them in for payment.
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I prefer not to fill out forms or keep receipts. I want most of my care
covered without a lot of paperwork.
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In addition to my premiums, I am willing to pay for the cost of routine
and preventive care, such as office visits, checkups, and shots. I also like
knowing that I can get an appointment for these services when I want one.
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I want a health plan that includes routine and preventive care. I don't
mind if I have to wait for these services to be scheduled for an available
appointment with my doctor.
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If I need to see a specialist, I probably will ask my doctor for a
recommendation, but I want to decide whom to go to and when. I don't want to
have to see my primary care doctor each time before I can see a specialist.
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I don't mind if my primary care doctor must refer me to specialists. If
my doctor doesn't think I need special services, that is fine with me.
If your answers are mostly 1: You want to make your own health care choices,
even if it costs you more and takes more paperwork. Fee-for-service may be the
best plan for you.
If your answers are mostly 2: You are willing to give up some choices to
hold down your medical costs. You also want help in managing your care. Consider
a health maintenance organization.
If your answers are some 1's and some 2's: You might want to look for a plan
such as a preferred provider organization that combines some of the features of
fee-for-service and a health maintenance organization.
The differences among fee-for-service plans, HMOs, and PPOs are not as
clear-cut as they once were. Fee-for-service plans have adopted some activities
used by HMOs and PPOs to control the use of medical services. And HMOs and PPOs
are offering more freedom to choose doctors, the way fee-for-service plans do.
By studying your health insurance options carefully, you will be able to pick
the one that provides you with the coverage you need, no matter what it is
called.
Managed Care: A Way to Control Costs
Managed care influences how much health care you use. Almost all plans have
some sort of managed care program to help control costs. For example, if you
need to go to the hospital, one form of managed care requires that you receive
approval from your insurance company before you are admitted to make sure that
the hospitalization is needed. If you go to the hospital without this approval,
you may not be covered for the hospital bill.
Types of Insurance
Fee-for-Service
This is the traditional kind of health care policy. Insurance companies pay
fees for the services provided to the insured people covered by the policy. This
type of health insurance offers the most choices of doctors and hospitals. You
can choose any doctor you wish and change doctors any time. You can go to any
hospital in any part of the country.
With fee-for-service, the insurer only pays for part of your doctor and
hospital bills. This is what you pay:
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A monthly fee, called a premium.
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A certain amount of money each year, known as the deductible, before the
insurance payments begin. In a typical plan, the deductible might be $250
for each person in your family, with a family deductible of $500 when at
least two people in the family have reached the individual deductible. The
deductible requirement applies each year of the policy. Also, not all health
expenses you have count toward your deductible. Only those covered by the
policy do. You need to check the insurance policy to find out which ones are
covered.
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After you have paid your deductible amount for the year, you share the
bill with the insurance company. For example, you might pay 20 percent while
the insurer pays 80 percent. Your portion is called coinsurance.
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To receive payment for fee-for-service claims, you may have to fill out
forms and send them to your insurer. Sometimes your doctor's office will do this
for you. You also need to keep receipts for drugs and other medical costs. You
are responsible for keeping track of your medical expenses.
There are limits as to how much an insurance company will pay for your claim
if both you and your spouse file for it under two different group insurance
plans. A coordination of benefit clause usually limits benefits under two plans
to no more than 100 percent of the claim.
Most fee-for-service plans have a "cap," the most you will have to
pay for medical bills in any one year. You reach the cap when your out-of-pocket
expenses (for your deductible and your coinsurance) total a certain amount. It
may be as low as $1,000 or as high as $5,000. Then the insurance company pays
the full amount in excess of the cap for the items your policy says it will
cover. The cap does not include what you pay for your monthly premium.
Some services are limited or not covered at all. You need to check on
preventive health care coverage such as immunizations and well-child care.
There are two kinds of fee-for-service coverage: basic and major medical.
Basic protection pays toward the costs of a hospital room and care while you are
in the hospital. It covers some hospital services and supplies, such as x-rays
and prescribed medicine. Basic coverage also pays toward the cost of surgery,
whether it is performed in or out of the hospital, and for some doctor visits.
Major medical insurance takes over where your basic coverage leaves off. It
covers the cost of long, high-cost illnesses or injuries.
Some policies combine basic and major medical coverage into one plan. This
is sometimes called a "comprehensive plan." Check your policy to make
sure you have both kinds of protection.
What Is a "Customary" Fee?
Most insurance plans will pay only what they call a reasonable and customary
fee for a particular service. If your doctor charges $1,000 for a hernia repair
while most doctors in your area charge only $600, you will be billed for the
$400 difference. This is in addition to the deductible and coinsurance you would
be expected to pay. To avoid this additional cost, ask your doctor to accept
your insurance company's payment as full payment. Or shop around to find a
doctor who will. Otherwise you will have to pay the rest yourself.
Questions to Ask About Fee-for-Service Insurance
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How much is the monthly premium? What will your total cost be each year?
There are individual rates and family rates.
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What does the policy cover? Does it cover prescription drugs,
out-of-hospital care, or home care? Are there limits on the amount or the
number of days the company will pay for these services? The best plans cover
a broad range of services.
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Are you currently being treated for a medical condition that may not be
covered under your new plan? Are there limitations or a waiting period
involved in the coverage?
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What is the deductible? Often, you can lower your monthly health
insurance premium by buying a policy with a higher yearly deductible amount.
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What is the coinsurance rate? What percent of your bills for allowable
services will you have to pay?
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What is the maximum you would pay out of pocket per year? How much would
it cost you directly before the insurance company would pay everything else?
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Is there a lifetime maximum cap the insurer will pay? The cap is an
amount after which the insurance company won't pay anymore. This is
important to know if you or someone in your family has an illness that
requires expensive treatments.
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Health Maintenance Organizations (HMOs)
Health maintenance organizations are prepaid health plans. As an HMO member,
you pay a monthly premium. In exchange, the HMO provides comprehensive care for
you and your family, including doctors' visits, hospital stays, emergency care,
surgery, lab tests, x-rays, and therapy.
The HMO arranges for this care either directly in its own group practice
and/or through doctors and other health care professionals under contract.
Usually, your choices of doctors and hospitals are limited to those that have
agreements with the HMO to provide care. However, exceptions are made in
emergencies or when medically necessary.
There may be a small copayment for each office visit, such as $5 for a
doctor's visit or $25 for hospital emergency room treatment. Your total medical
costs will likely be lower and more predictable in an HMO than with
fee-for-service insurance.
Because HMOs receive a fixed fee for your covered medical care, it is in
their interest to make sure you get basic health care for problems before they
become serious. HMOs typically provide preventive care, such as office visits,
immunizations, well-baby checkups, mammograms, and physicals. The range of
services covered vary in HMOs, so it is important to compare available plans.
Some services, such as outpatient mental health care, often are provided only on
a limited basis.
Many people like HMOs because they do not require claim forms for office
visits or hospital stays. Instead, members present a card, like a credit card,
at the doctor's office or hospital. However, in an HMO you may have to wait
longer for an appointment than you would with a fee-for-service plan.
In some HMOs, doctors are salaried and they all have offices in an HMO
building at one or more locations in your community as part of a prepaid group
practice. In others, independent groups of doctors contract with the HMO to take
care of patients. These are called individual practice associations (IPAs) and
they are made up of private physicians in private offices who agree to care for
HMO members. You select a doctor from a list of participating physicians that
make up the IPA network. If you are thinking of switching into an IPA-type of
HMO, ask your doctor if he or she participates in the plan.
In almost all HMOs, you either are assigned or you choose one doctor to
serve as your primary care doctor. This doctor monitors your health and provides
most of your medical care, referring you to specialists and other health care
professionals as needed. You usually cannot see a specialist without a referral
from your primary care doctor who is expected to manage the care you receive.
This is one way that HMOs can limit your choice.
Before choosing an HMO, it is a good idea to talk to people you know who are
enrolled in it. Ask them how they like the services and care given.
Questions to Ask About an HMO
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Are there many doctors to choose from? Do you select from a list of
contract physicians or from the available staff of a group practice? Which
doctors are accepting new patients? How hard is it to change doctors if you
decide you want someone else? How are referrals to specialists handled?
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Is it easy to get appointments? How far in advance must routine visits
be scheduled? What arrangements does the HMO have for handling emergency
care?
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Does the HMO offer the services I want? What preventive services are
provided? Are there limits on medical tests, surgery, mental health care,
home care, or other support offered? What if you need a special service not
provided by the HMO?
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What is the service area of the HMO? Where are the facilities located in
your community that serve HMO members? How convenient to your home and
workplace are the doctors, hospitals, and emergency care centers that make
up the HMO network? What happens if you or a family member are out of town
and need medical treatment?
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What will the HMO plan cost? What is the yearly total for monthly fees?
In addition, are there copayments for office visits, emergency care,
prescribed drugs, or other services? How much?
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Preferred Provider Organizations (PPOs)
The preferred provider organization is a combination of traditional
fee-for-service and an HMO. Like an HMO, there are a limited number of doctors
and hospitals to choose from. When you use those providers (sometimes called
"preferred" providers, other times called "network"
providers), most of your medical bills are covered.
When you go to doctors in the PPO, you present a card and do not have to
fill out forms. Usually there is a small copayment for each visit. For some
services, you may have to pay a deductible and coinsurance.
As with an HMO, a PPO requires that you choose a primary care doctor to
monitor your health care. Most PPOs cover preventive care. This usually includes
visits to the doctor, well-baby care, immunizations, and mammograms.
In a PPO, you can use doctors who are not part of the plan and still receive
some coverage. At these times, you will pay a larger portion of the bill
yourself (and also fill out the claims forms). Some people like this option
because even if their doctor is not a part of the network, it means they don't
have to change doctors to join a PPO.
Questions to Ask About a PPO
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Are there many doctors to choose from? Who are the doctors in the PPO
network? Where are they located? Which ones are accepting new patients? How
are referrals to specialists handled?
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What hospitals are available through the PPO? Where is the nearest
hospital in the PPO network? What arrangements does the PPO have for
handling emergency care?
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What services are covered? What preventive services are offered? Are
there limits on medical tests, out-of-hospital care, mental health care,
prescription drugs, or other services that are important to you?
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What will the PPO plan cost? How much is the premium? Is there a
per-visit cost for seeing PPO doctors or other types of copayments for
services? What is the difference in cost between using doctors in the PPO
network and those outside it? What is the deductible and coinsurance rate
for care outside of the PPO? Is there a limit to the maximum you would pay
out of pocket?
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Checklist: What's Most Important to You?
Insurance plans vary. Before choosing a plan, decide what is most important
to you. This checklist can help. Put a check in front of those services that are
important to you. Then see how many of these services are in Policy #1, Policy
#2, and Policy #3. On the checklist, write in the coinsurance or copayment rate,
if there is one, and any limits on service.
Remember that the most important service to be covered is hospitalization.
If you are not covered for hospital care, then one sickness could cost you
thousands of dollars, even hundreds of thousands of dollars.
Service
Policy #1 Policy #2 Policy #3
-Hospital care
-Surgery (inpatient
and outpatient)
-Office visits to
your doctor
-Maternity care
-Well-baby care
-Immunizations
-Mammograms
-Medical tests,
x-rays
-Mental health care
-Dental care,
braces and cleaning
-Vision care,
eyeglasses and exams
-Prescription drugs
-Home health care
-Nursing home care
-Services you need
that are excluded
Other issues that are
important to you:
-Choice of doctors
-Convenient location of
doctors and hospitals
-Ease of getting
an appointment
-Minimal paperwork
-Waiting period before
coverage begins
Which policy is best for you?
Worksheet: What Is Your Best Buy?
It is difficult to determine exactly what you will spend a year on health
care. You do not know whether you will be sick 6 months from now and need an
operation. Hopefully, you will not.
Using this worksheet, you can begin to make some rough estimates. Much will
depend on what service you need or want, how many people are in your family,
your age, and other factors. Do you need to have your eyes tested this year?
Will you have a mammogram or other cancer screening test? Does your child need
immunizations?
Look at your medical and insurance records from last year as a guide to what
services you might use this year. Add up the actual costs to you, including
premiums. Estimate what you might spend on your health care in terms of
deductibles, coinsurance and/or copayments, and services that are not covered.
Compare Policy #1, Policy #2, and Policy #3 to determine which is the best
buy for you.
What is your monthly premium? Policy
#1 Policy #2 Policy #3
Individual:
Family:
Multiply by 12 for annual cost:
What is your deductible?
(if there is one)
Individual:
Family:
What is your coinsurance rate
or copayment, if there is one?
(Note if there is a higher rate
for special services, such as
outpatient mental health care.)
Are there any annual limits for
days or services covered and
the amount spent on you?
What is the maximum you will have
to pay out-of-pocket each year?
What is the lifetime limit,
if any,that you will be
reimbursed?
Total estimated yearly cost
to you:
Now look at the checklist of services that are important to you. Is
your best buy the same policy that gives you the most services you need?
Other Types of Insurance
Medicare
Medicare is the Federal health insurance program for Americans age 65 and
older and for certain disabled Americans. If you are eligible for Social
Security or Railroad Retirement benefits and are age 65, you and your spouse
automatically qualify for Medicare.
Medicare has two parts: hospital insurance, known as Part A, and
supplementary medical insurance, known as Part B, which provides payments for
doctors and related services and supplies ordered by the doctor. If you are
eligible for Medicare, Part A is free, but you must pay a premium for Part B.
Medicare will pay for many of your health care expenses, but not all of
them. In particular, Medicare does not cover most nursing home care, long-term
care services in the home, or prescription drugs. There are also special rules
on when Medicare pays your bills that apply if you have employer group health
insurance coverage through your own job or the employment of a spouse.
Medicare usually operates on a fee-for-service basis. HMOs and similar forms
of prepaid health care plans are now available to Medicare enrollees in some
locations.
The best source of information on the Medicare program is the Medicare
Handbook. This booklet explains how the Medicare program works and what your
benefits are. To order a free copy, write to: Health Care Financing
Administration, Publications, N1-26-27, 7500 Security Blvd., Baltimore, MD
21244-1850. You also can contact your local Social Security office for
information.
Some people who are covered by Medicare buy private insurance, called "Medigap"
policies, to pay the medical bills that Medicare doesn't cover. Some Medigap
policies cover Medicare's deductibles; most pay the coinsurance amount. Some
also pay for health services not covered by Medicare. There are 10 standard
plans from which you can choose. (Some States may have fewer than 10.) If you
buy a Medigap policy, make sure you do not purchase more than one.
You need to shop carefully before deciding on the best policy to fit your
needs. You may get another booklet, Guide to Health Insurance for People with
Medicare, to help you in making the right choice. To order a free copy,
write to: Health Care Financing Administration, Publications, N1-26-27, 7500
Security Blvd., Baltimore, MD 21244-1850.
Another good source of information on the same topic is The Consumer's
Guide to Medicare Supplement Insurance. To order a free copy, write to:
Health Insurance Association of America, 555 13th St., N.W., Suite 600 East,
Washington, D.C. 20004.
Medicaid
Medicaid provides health care coverage for some low-income people who cannot
afford it. This includes people who are eligible because they are aged, blind,
or disabled or certain people in families with dependent children. Medicaid is a
Federal program that is operated by the States, and each State decides who is
eligible and the scope of health services offered.
General information on the Medicaid program is given in the Medicaid Fact
Sheet. For a free copy, write to: Health Care Financing Administration,
Publications, N1-26-27, 7500 Security Blvd., Baltimore, MD 21244-1850. For
specifics on Medicaid eligibility and the health services offered, contact your
State Medicaid Program Office.
Disability Insurance
Disability insurance replaces income you lose if you have a long-term
illness or injury and cannot work. This is an important type of coverage for
working-age people to consider. Disability insurance does not cover the cost of
rehabilitation if you are injured. Check your major medical insurance to see if
it is covered there.
Some employers offer group disability insurance and this may be one of the
benefits where you work. Or you might be eligible for some government-sponsored
programs that provide disability benefits. Many different kinds of individual
policies are also available.
The Consumer's Guide to Disability Insurance explains disability
insurance and sources of disability income to help you decide if you need this
coverage. It will also help you compare your choices of policies. For a free
copy, write to: Health Insurance Association of America, 555 13th St., N.W.,
Suite 600 East, Washington, D.C. 20004.
Hospital Indemnity Insurance
This insurance offers limited coverage. It pays a fixed amount for each day,
up to a maximum number of days. You may use it for medical or other expenses.
Usually, the amount you receive will be less than the cost of a hospital stay.
Some hospital indemnity policies will pay the specified daily amount even if
you have other health insurance. Others may coordinate benefits, so that the
money you receive does not equal more than 100 percent of the hospital bill.
Long-Term Care Insurance
Long-term care insurance is designed to cover the costs of nursing home
care, which can be several thousand dollars each month. Long-term care is
usually not covered by health insurance except in a very limited way. Medicare
covers very few long-term care expenses. There are many plans and they vary in
costs and services covered, each with its own limits.
More detailed information is given in A Shopper's Guide to Long-Term Care
Insurance. Contact your State Insurance Department or write: National
Association of Insurance Commissioners, 120 W. 12th Street, Suite 1100, Kansas
City, MO 64105.
Another good source of information is The Consumer's Guide to Long-Term
Care Insurance. For a free copy, write to: Health Insurance Association of
America, 555 13th St., N.W., Suite 600 East, Washington, D.C. 20004.
A Final Word
There's no doubt that choosing among health insurance plans takes time and
effort. Now that you have read this information, you know what questions to ask
so you will be able to carefully compare various plans and find the one that
best fits your needs.
Understanding Health Insurance Terms
Coinsurance: The amount you are required to pay for medical care in a
fee-for-service plan after you have met your deductible. The coinsurance rate is
usually expressed as a percentage. For example, if the insurance company pays 80
percent of the claim, you pay 20 percent.
Coordination of Benefits: A system to eliminate duplication of benefits when
you are covered under more than one group plan. Benefits under the two plans
usually are limited to no more than 100 percent of the claim.
Copayment: Another way of sharing medical costs. You pay a flat fee every
time you receive a medical service (for example, $5 for every visit to the
doctor). The insurance company pays the rest.
Covered Expenses: Most insurance plans, whether they are fee-for-service,
HMOs, or PPOs, do not pay for all services. Some may not pay for prescription
drugs. Others may not pay for mental health care. Covered services are those
medical procedures the insurer agrees to pay for. They are listed in the policy.
Deductible: The amount of money you must pay each year to cover your medical
care expenses before your insurance policy starts paying.
Exclusions: Specific conditions or circumstances for which the policy will
not provide benefits.
HMO (Health Maintenance Organization): Prepaid health plans. You pay a
monthly premium and the HMO covers your doctors' visits, hospital stays,
emergency care, surgery, checkups, lab tests, x-rays, and therapy. You must use
the doctors and hospitals designated by the HMO.
Managed Care: Ways to manage costs, use, and quality of the health care
system. All HMOs and PPOs, and many fee-for-service plans, have managed care.
Maximum Out-of-Pocket: The most money you will be required pay a year for
deductibles and coinsurance. It is a stated dollar amount set by the insurance
company, in addition to regular premiums.
Noncancellable Policy: A policy that guarantees you can receive insurance,
as long as you pay the premium. It is also called a guaranteed renewable policy.
PPO (Preferred Provider Organization): A combination of traditional
fee-for-service and an HMO. When you use the doctors and hospitals that are part
of the PPO, you can have a larger part of your medical bills covered. You can
use other doctors, but at a higher cost.
Preexisting Condition: A health problem that existed before the date your
insurance became effective.
Premium: The amount you or your employer pays in exchange for insurance
coverage.
Primary Care Doctor: Usually your first contact for health care. This is
often a family physician or internist, but some women use their gynecologist. A
primary care doctor monitors your health and diagnoses and treats minor health
problems, and refers you to specialists if another level of care is needed.
Provider: Any person (doctor, nurse, dentist) or institution (hospital or
clinic) that provides medical care.
Third-Party Payer: Any payer for health care services other than you. This
can be an insurance company, an HMO, a PPO, or the Federal Government.
Additional Resources:
Internet Citation:
Checkup on Health Insurance Choices. AHCPR Publication No. 93-0018,
December 1992. Agency for Health Care Policy and Research, Rockville, MD.
http://www.ahrq.gov/consumer/insuranc.htm
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