A plain English explanation of your health Insurance options

Managed Care Plans

The most common form of health insurance today is known as managed care. Within the managed care umbrella (Major Medical Plans), you’ll find three types of plans — health maintenance organizations (HMOs), preferred provider organizations (PPOs) and HSA plans (Health Savings Account - a PPO with a medical, tax-advantaged savings account).

HSA Plans  (Most affordable way to go)

HSA or Health Savings Accounts are a new type of PPO that are very advantageous and are really the new wave of health insurance plans. You see HSA plans are the closest thing to self insuring, which dramatically saves you money (click here to learn more about HSA plans). The concept is that you have a high-deductible PPO plan so that if you get an unexpected major illness or accident, you are limited to paying your deductible or max-out-of-pocket. On the other hand, the HSA offers a tax-deferred savings account to save for any expenses that you would pay due to your high deductible. The net gain is way lower premiums and a tax-advantaged savings plan in the event of the unexpected medical expense.  We specialize in HSA plans, so call us to see how much you can save on your premiums with an HSA plan! 
(800)-610-6418.

Preferred Provider Organizations (PPOs)

PPOs have become the most widely preferred plan due to their flexibility of providers and the ability to easily lower your monthly premium by adjusting your deductible and copay.

A PPO has arrangements with doctors, hospitals and other healthcare providers that have agreed to accept lower fees from the insurer for their services (pre-negotiated fees).  Participants who visit network doctors pay co-payments, or set amounts for certain services; individuals who venture outside the network pay higher fees in the form of deductibles and co-insurance payments. PPO members also are required to make up the difference between what their personal provider charges and what the healthcare plan pays (co-payments). As a result, cost sharing is lower for plan members within a PPO network. Network healthcare providers make referrals, but plan members can self-refer to doctors and specialists, including those outside the plan.

Advantages

• You can choose any doctor in network without a referral.

• Fees are negotiated in advance, protecting against over charging (i.e., you get the negotiated rate when staying within the network).

• You are allowed to go to any specialist or provider even when not in the PPO network. Keep in mind that your costs and co-pays will usually be higher, but coverage is still in force.

Disadvantages

• Participants have to use a preferred provider to save money and get the negotiated rate.

• More management of billing may be required vs. an HMO.

• Out of pocket costs may increase if insured goes out of network.

• Preventative care may not be covered until deductibles are met.

Health Maintenance Organizations (HMOs)
HMOs are the oldest form of managed care plans and typically the least expensive way to receive medical care. HMOs offer a wide range of health benefits, from preventive care to hospitalization to surgery, for a set monthly fee.

Advantages

• Little out of packet expense for participants.

• Little or no paperwork.

• Comprehensive preventative care and health improvement programs.

Disadvantages

• HMO participants give up the freedom to choose their own doctors and must use doctors within the HMO network.

• Primary Care Physicians (PCP) typically refer patients to doctors and specialists within the HMO network for different healthcare needs.

• No coverage outside the HMO, except for extreme emergencies.

Point-of-Service Plans (POS)
Many HMOs offer an indemnity-type option known as a POS plan. Primary care doctors in POS plans usually refer patients to other providers in the plan, but members can refer themselves outside the plan and still get coverage. If the doctor refers out of the network, the plan pays all or most of the bill. If POS members self-refer to doctors or specialists outside the network, they will have to pay a predetermined amount of coinsurance.

Advantages

• Participants have flexibility to go outside of network doctors.
• Participants have little cost if they use in network doctors.
• Preventative care usually covered.

Disadvantages

• Costs are high if participant goes outside of network providers.
• Referrals are needed from Primary Care Physician (PCP) for specialists..
• By passing PCP can result in higher cost out of pocket for medical services.

Indemnity Plans  (Not recommended)

Right off the bat I want to stress to you that the Indemnity plans are no longer viable in today's world of expensive, high tech treatments, diagnostics and surgeries. Indemnity plans were the only form of insurance 30 years ago when medicine and doctors were affordable. 

Now indemnity plans could leave you with a mountain of uncovered medical expenses to pay and bankrupt you very quickly. You see, indemnity plans only cover for itemized services and procedures (called a fee-schedule) and if your treatment or service is not listed in the fee-schedule, (like chemotherapy for example), you would be liable for the payment of those services. On the other hand a major medical plan such as an HMO or PPO by default covers most all services, unless specifically excluded in writing in the benefits section of your policy.

NOTE::
Beware of the associations that specialize in offering these indemnity plans to the self-employed. You are much safer with a major medical plan, such as a PPO, HMO or HSA.