lkj

Health Plan: a health plan offers insurance protection against injuries or illness and can help you with the cost of preventative care, prescription drugs and more. Types of health plans may include (but are not limited to):

Types of Healthcare Plans

Descriptions
PPO Preferred Provider Organization A health insurance plan that offers in-network as well as out-of-network coverage. However, out-of-network coverage is typically subject to either a higher deductible or lower co-insurance than in-network. No referrals are required in order to access care.
HMO Health Maintenance Organization A health insurance plan that requires that covered individuals see only doctors or hospitals on their list of providers. When one joins an HMO, one is usually asked to choose a primary care physician; this doctor then acts in part as the HMO’s agent in determining what treatments the patient does and does not need. When the primary care physician determines that the patient needs care they cannot offer, they give a referral to a specialist that can address the patient’s concerns. Emergency visits are exempt from this referral limitation.
HSA Health Savings Account-Compatible Plan Health Savings Accounts are a special kind of tax-advantaged savings account used to accumulate funds for medical expenses.

  • The insurance side: An insured will open up a high deductible health plan (HDHP) that typically offers a higher deductible in return for generally lower premiums.
  • The health-savings account side: At the same time the insured also open up a health-savings account (HSA) with a bank that is linked to the insurance plan. In addition to paying a premium for the insurance plan, the insured will also contribute money to his or her health-savings account and then use those funds to pay for insurance deductibles, coinsurance, doctor visits, prescription drugs and many other qualified expenses.
  • IRS listing of medically qualified expenses HERE
  • NOT “use-it-or-lose-it”: Funds in a health savings account can roll over year-to-year
  • Income tax deduction: In 2015, an individual can take up to $3,350 (or $4,350 if age 55 or older) of funds contributed to an HSA as an income tax deduction, and families can take up to a $6,650 deduction.


Premium:
A payment made on a scheduled basis to an insurance company. Premiums are based on variables such as cost of care in your area, your health history, the number of people to insure, and more.


Deductible:
What you pay for medical expenses before your benefits kick in. Most deductibles reset annually. Many plans offer annual preventative care with the deductible waived (up to a set limit).

Example: If you have a plan with a $1000 deductible, and then need a surgery that costs $5000, you will first need to pay $1000 before insurance benefits kick in.


Coinsurance:
The percentage of costs that an insurance company pays after you meet your deductible.

Example: If you have a plan with a $1000 deductible and 80% coinsurance, and you then need a surgery that costs $5000, you will
1) First, pay your $1000 deductible – leaves $4000 in costs
2) After you meet the deductible, the insurance company will pay for 80% of the remaining $4000 in costs (e.g. they pay $3200, you pay the other 20%, or $80)


Out-of-pocket maximum:
The maximum amount per year that you pay for medical expenses after your deductible.

Example: If you have a plan with a $1000 deductible, 80% coinsurance and a $3000 out of pocket maximum, and then need treatments that cost $30,000, you will:
1) First, meet your $1000 deductible – leaves $29,000 in costs
2) Pay your 20% of the coinsurance (insurance carrier pays the other 80%)
3) Once your 20% of costs totals $3000 (your out of pocket maximum), the insurance company takes over the rest of the covered expenses 100%.

Summary: You pay $1000 (deductible) + $3000 (out of pocket max). Insurance company pays remaining $26,000.


Doctor visit copay:
A specified dollar amount to be paid by an insured person to a doctor/provider for an office visit and/or covered expenses of certain benefits.

Example: Plan may have a $25 copay for visits to a primary care physician, and a $50 copay for visits to a specialist. Some plans offer


Prescription drug copay:
A specified dollar amount to be paid by an insured person for prescription drugs. Prescription drugs are often tiered as “generic,” “brand” and “non-formulary” (Or “Tier 1,” Tier 2,” “Tier 3” and “Tier 4”) and have accordingly different copays.

Example: $10 copay for generic, $25 copay for brand, and $50 copay for non-formulary.


Network Provider:
Hospital, health care facility or practitioner or other provider who is designated by a specific insurance company to provide services to covered individuals. These providers are referred to as being “in-network.” If covered individuals see to “Out-of-Network” providers, they can sometimes be subject to higher deductibles, coinsurance percentages and/or out of pocket maximums.