HMO & EPO Health Plans
Most health insurance plans offered in the Marketplace have networks of hospitals, doctors, specialists, pharmacies, and other health care providers. Networks include health care providers that the plan contracts with to take care of the plan’s members. Depending on the type of policy you buy, care may be covered only when you get it from a network provider. When comparing plans in the Marketplace, you will see a link to a list of providers in each plan’s network. If staying with your current doctors is important to you, check to see if they are included before choosing a plan.
There are different types of health insurance plans that meet different needs. Some examples include HMO and EPO plans.
- Health Maintenance Organization (HMO): A type of health insurance plan that usually limits coverage to care from doctors who work for or contract with the HMO. It generally won't cover out-of-network care except in an emergency. An HMO may require you to live or work in its service area to be eligible for coverage. Most HMO plans require you to get a referral from your primary care doctor in order to see a specialist.
- Exclusive Provider Organization (EPO): A managed care plan where services are covered only if you go to doctors, specialists, or hospitals in the plan’s network (except in an emergency). Some EPO plans require you to get a referral from your primary care doctor in order to see a specialist.
What doesn't qualify as health insurance coverage
Health plans that don't meet minimum essential coverage don't qualify as coverage; you may have to pay the ACA fee.
Examples include: Short Term health insurance - coverage only for vision care or dental care - workers' compensation - coverage only for a specific disease or condition - plans that offer only discounts on medical services. More information: healthcare.gov
Understanding Deductibles and Out-of-Pocket Costs
Health care costs and terms can be confusing. To help you better understand costs and what they mean to you, here's a guide to some basic terms.
Summary of Benefits and Coverage
An easy-to-read summary that lets you make apples-to-apples comparisons of costs and coverage between health plans. You can compare options based on price, benefits, and other features that may be important to you. You'll get the "Summary of Benefits and Coverage" (SBC) when you shop for coverage on your own or through your job, renew or change coverage, or request an SBC from the health insurance company.
Terms You Should Know - First, it's helpful to know the language.
Some terms are unique to health coverage while others, such as "deductible," can also be used with other types of insurance. For instance, when "non-covered" or "out-of-pocket" costs are referenced, it means:
Non-covered costs: This catch-all phrase describes costs for medical services not covered by your plan. Think of these costs as 100 percent your responsibility. These costs are not reimbursable and do not apply to your out-of-pocket maximum.
Maximum out-of-pocket: This is the most you will have to pay out of your own pocket during a particular benefit period for services covered under your health care plan after any deductible is met. This amount is accrued over a defined benefit period, which is most often a calendar year. After this cap has been reached, your plan will pay full benefits for the rest of the benefit period for covered benefits.
Other than your premiums, your out-of-pocket costs most often fall into these three categories:
Deductible: This is a fixed amount you must pay before your health care plan begins paying benefits. It's also known as an annual deductible since it is accrued over your benefit period, which can vary but is typically 12 months long. Please note that some plans have separate deductibles.
Copayment: This is a fixed dollar amount you must pay for covered services. This may include services from your doctor or other health care provider, filling a prescription and more. The copayment amount may vary by doctor or other health care provider, specialist, service or type of prescription drug (brand or generic).
Coinsurance: Unlike a copayment, this is a percentage of the cost of a covered service that you are responsible for paying. Unlike a copayment, which is a fixed amount, coinsurance amounts will vary based on the cost of the service you received.
Know how your health insurance plan covers prescription drug coverage and what the benefits are.
Here’s some things to consider:
- Deductibles – Some plans have your drugs covered where you are responsible to meet a deductibles first, others are covered first dollar with a copay.
- Copay and Coinsurance – A copay is a set amount, regardless of the cost of the drug in the formulary. Coinsurance means you’re responsible for a percentage of the total cost of the drug.
- Formularies – Insurance companies categorize prescription drugs in formularies, which is a list of drugs they will cover. You will pay more out of pocket if your drug is not on the list.
- Tiers – Formularies price drugs by tiers which indicates how much you’ll pay. These tiers generally range from generic to some specialty drugs. If you have copays on your plan, a Tier 1 drug (generic) might be a $10 co-pay, a Tier 2 (preferred brand) might be $30, etc. There are now some plans that have up to 6 tiers.
Some drugs require authorization and/or limits. You may need to get your physician involved in these areas.
- Quantity Limits – Most formularies limit the amount of a drug you can purchase at one time. 30 pills in 30 days, and so on.
- Step Therapy – Some drugs require you to try another drug (typically cheaper) first before you can fill the drug (typically expensive) you are interested in. In most cases, you have to provide evidence that the first drug didn’t work for you before they’ll approve the second drug.
- Prior Authorization – Even if a drug is on formulary doesn’t mean it’s automatically covered. The insurance company has to approve many drugs before they are filled with no guarantee they will approve it.
Getting to Know Your Plan
Now that you know some of the terms, how do you figure out what your out-of-pocket costs may be? Coverage can differ from plan to plan, and the first step is to learn what's covered under your plan.
- Staying In-Network: Knowing how your plan works is a key step to avoiding any surprises. For instance, most plans offer greater coverage and benefits when you use a doctor or other health care provider who is a contracting ("in-network") provider. To help keep your costs down, be sure to check that your doctor or other health care provider is in your plan's network before you visit.
- Know Your Plan's Cost Features: You should always check to make sure health care services are covered under your plan before receiving care. Some plans offer coverage for extra services outside of your basic medical plan, such as maternity, dental or prescription drug coverage. These services are not automatically covered in all plans, so it's important to know what you are covered for before seeing your doctor or other health care provider.
Once you've confirmed your covered services, here are some other questions you might also want to answer before visiting your doctor or other health care provider:
- What is my deductible? How much of my deductible have I fulfilled this year so far? Do I have a family deductible?
- What is my copayment for the services I'm considering?
- What is my coinsurance percentage that I'm responsible for paying? What will the doctor or other health care provider charge for the service?
- Is this doctor or other health care provider in- or out-of-network?
Get to Know Your Provider Network
Your plan's provider network is designed to promote quality, convenience and cost management. A specific network of doctors, hospitals and other health care professionals, sometimes called providers, helps keep your premiums lower for a number of reasons:
Doctors and other health care providers that are in the network have agreements with the insurance company that can save you money. The doctors and other health care providers have agreed to a discounted rate and have agreed not to "balance bill" members.
Streamlined claim processing helps keep costs down.
When you choose to visit a doctor or other health care provider outside the network, your out-of-pocket costs can go up. Keep in mind that plans can differ and doctors or other health care providers can also differ. Some plans offer you limited reimbursement, while others may offer no coverage at all for out-of-network services. Since doctors and other health care providers outside the network don't have an agreement with your insurance company, no discounts have been pre-arranged.
When thinking about your options, look closely at the plan's network. Check to see if you will be able to be reimbursed for covered services within the network, or whether reimbursement is sufficient, if you decide to go outside the network. Remember that cost is only one factor when choosing a doctor or other health care provider. Only you can decide what's right for you.
Costs versus Coverage
With so many types of health insurance plans out there, it can be hard to see the relationship between coverage and costs. Keep in mind that a health care plan is like other types of insurance in one respect: the more potential costs you are willing to take on yourself, the lower your premiums.
Premiums Can Drive Deductibles
Many plans have a deductible, which is a fixed amount you must pay before health care benefits begin. Most of the time, it can be said that the higher the deductible, the lower the premium. That's because you're agreeing to take on some of the potential costs for services yourself. The same rule is true when it comes to plans that have limited or basic coverage, versus those that cover much more. Basic plans usually have lower premiums than more comprehensive plans. Again, that's because you're agreeing to take on some of the potential costs for services yourself if you choose a basic plan.
If you are willing to take on more financial responsibility for your own health care costs, it usually means your premiums will be lower. If you've found that you've miscalculated how many costs you can manage on your own with your current coverage, you should consider the following when reviewing your plan options.
Health Care Costs
Coinsurance and other out-of-pocket costs can affect your health insurance costs. Here are some typical scenarios that may help you better understand these potential costs.
Here's an example:
Let's say you've met your annual deductible, so your plan now provides benefits for covered services. You may wonder what you will have to pay if you visit your doctor or other health care provider. The answer depends on the percentage your plan pays for covered medical services after your deductible is met.
For example, you bruise your hip in a fall and you need an X-ray. If your plan covers 80 percent of an X-ray, here's how the costs might break down: The X-ray costs are $200.
Your plan covers 80 percent, which is $160.
Your coinsurance, 20 percent is $40 for the X-ray.
You should also know about the maximum limit (sometimes called "allowable amount" or "eligible charge") for a procedure or medical service based on your plan. This is the most your plan will pay for a particular service. These set amounts help manage overall rates.
Let's say your doctor or other health care provider charges more for an X-ray than your plan's maximum limit*:
Your plan pays up to $150 for an X-ray.
Your doctor or other health care provider charges $200.
You may be responsible for the $50 difference.
So, when calculating the amount you will have to pay (often referred to as your out-of-pocket costs), two things to keep in mind are:
The percentage that is covered by your plan.
The limit for any specific service you'll be using.
But what if you haven't met your annual deductible and your child breaks her arm?
In this example, we'll assume you take her to the emergency room.
After X-rays, diagnosis, casting and more, the total bill is $2,400.
Your plan covers 80 percent of emergency room services after a $75 copayment.
Plus you have a $500 family deductible to fulfill.
You are responsible for the first $500, which is your deductible, plus the $75 copayment.
That leaves a balance of $1,825.
Your plan will pay 80 percent of the doctor's or other health care provider's contracted allowable amount, which is $1,460.
You are responsible for 20 percent of the doctor's or other health care provider's contracted allowable amount, which is $365. Your total out-of-pocket cost for this incident will be $940.
In this scenario you will have met your annual deductible and any future medical services during that year will be reimbursed based on your plan's benefit design until your out-of-pocket maximum is met or until the new benefit period begins. In the above example, if you had already fulfilled your annual deductible, your cost would have been only $540
A provider who doesn’t have a contract with your health insurer or plan to provide services to you. You’ll pay more to see a non-preferred provider. Check your policy to see if you can go to all providers who have contracted with your health insurance or plan, or if your health insurance or plan has a “tiered” network and you must pay extra to see some providers.
Eight Ways to Keep Your Costs Down
There are some things you can do to help manage your health care out-of-pocket costs. You can help keep your expenses in check with these useful tips.
Eight Ways to Help Manage Health Care Costs:
1. Check your Explanation of Benefits (EOB) – Look at your EOBs carefully. Make sure you are not being charged for tests or services that never happened. See Understanding Your Explanation of Benefits (EOB) for more tips.
2. Build it into your budget – When you can, be sure to include health care costs in your budget. For example, if you're planning to have a baby next year, think about switching to a plan that may help with some of the extra costs.
3. Know your prescription drug costs – Make sure you know all the details of your prescription drug plan (if you have coverage). In some cases, you can save on costs by going to certain pharmacies or by using mail order pharmacy services. Choosing generic drugs over brand name versions may also help lower costs.
4. Plan ahead – Avoid using the ER for primary care or non-emergency care. If you're not feeling well, try to see your doctor or other health care provider during normal business hours. You can also visit a retail health center or an urgent care center that has extended hours.
5. Take care of yourself – It sounds simple, but exercising and eating right may save you money on health care costs.
6. Get a physical exam – Prevention is key. Stay on top of your health and you may avoid more serious medical costs and issues down the line. Talk to your doctor or other health care provider about how often you should get a physical. Usually once a year is recommended.
7. Make the most of your incentives – Take advantage of incentives that promote healthy actions like getting a physical, quitting smoking and exercising.
8. Check to see if your plan offers discounts – Some health plans offer discounts and special offers for health clubs, weight management programs and more.
Health insurance purchasing tips
BUY FROM GOOD COMPANIES!
See what the Texas Department of Insurance has to say about the company you are considering. Are they financially strong and stable? How are they rated?
WHAT PROVIDERS ARE COVERED
If it is important to keep your doctors, then it is vital to see if they are on the plan you are considering. Research your doctors as well as hospitals and facilities that are close to you.
FIND OUT WHAT IS COVERED
How are things such as doctor's visits, emergency care, OB GYN coverage, preventative screenings, and prescriptions covered? Find out what services are covered (read the summary/outline of coverage).
FIND OUT WHAT IS NOT COVERED
Insurance companies publish Exclusions and Limitations in their brochure, summary of coverage and policy for you to determine what services are not covered by your health plan.
DOES IT ALL ADD UP
Not only do you have an ongoing monthly premium, but you also are responsible for the deductibles, co-pays and out of pocket maximums (OOPM).
DO YOUR HOMEWORK!
Review the application for the plan you are interested in to see what the health questions are. If you have medical issues and/or are on medication, you can request an underwriting opinion before you apply. Read, ask questions - KNOW what you are buying! Take the time it deserves to research this very important product. We provide affordable individual health quotes with major carriers so that you can compare quotes for individual health insurance. Free quotes and save today.
Here are some questions to ask before you apply for a policy:
How are prescription drugs covered?
What is the difference between the deductible and the coinsurance?
If I raise my deductible will it lower my premium?
Is maternity covered in the policy?
Are there wellness benefits to cover mammograms and pap?
Is there a rate guarantee on this plan?
If I had a major illness will I get a rate increase?
Buy a comprehensive insurance policy that has the most benefits for the amount you can afford.
Make sure to consider the following before purchasing insurance:
Call your local Department of Insurance to verify if the agent is properly licensed.
Decide what you need and want before talk with the agent.
Do not be rushed into buying insurance.
Get a second opinion before you buy or replace insurance.
Do not buy anything you did not intend to purchase or do not want.
Do not replace an existing policy unless you can not afford it or the benefits no longer meet your needs.
Do not pay cash. (Do not write a check payable to the agent. Write the check payable to the insurance company).
Do not be intimidated.
If you feel unsure or uncomfortable DON'T DO IT!