Your Healthcare Field Guide, Part 2

Alphabet Soup: What are my options (and what do all those acronyms mean)?

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Choosing a health insurance plan is a big decision, but it doesn’t need to be an overwhelming one. In part one of Your Healthcare Field Guide we explained the anatomy of a health insurance plan: premiums, deductibles, copay, coinsurance, providers and provider networks.

Now that you know the lingo, it’s time to put that knowledge to practical use. Let’s break down the most popular insurance plan designs to their basic components so you can see which plan is right for you.

Insurance Plans

PPO: Preferred Provider Organization

  • Higher Premiums, Lower Deductibles
  • Biggest Strength: Flexibility
  • Biggest Drawback: Cost

A PPO is a great plan for anyone who needs to see specialists or who wants the option to go to any doctor at any time. You don’t need a referral to get into a specialist’s office, and you can see a doctor inside or outside your provider network. Here’s the catch: you save the most money by sticking with providers inside your network because you’ll have smaller copays and full coverage. Outside your network, expect to pay more out-of-pocket, and some services may not be covered.

HMO: Health Maintenance Organization

  • Lower Premiums, Higher Deductibles
  • Biggest Strength: Low Monthly Cost
  • Biggest Drawback: No out-of-network coverage

HMOs are usually pretty reasonably priced, but you’re bound strictly by that provider network if you want your insurance to cover your service. HMOs often require all of your care to go through your primary care physician – which means you’ll need a referral to see a specialist. Except in cases of emergency, don’t expect your benefits to cover any service out-of-network or specialty care without a referral.

EPO: Exclusive Provider Organization

  • Lower Premiums, Higher Deductibles
  • Biggest Strength: Balance
  • Biggest Drawback: No out-of-network coverage

Think of an EPO as a happy medium between a PPO and an HMO. In an EPO, you’re still restricted to your provider network, but within the network you can see any provider you want, even specialists, without a referral. You’ll save more money on your monthly premiums than on a PPO, and you have more flexibility in your provider network than on an HMO.

money-548948_640HDHP: High-Deductible Health Plans

  • Lower Premiums, Higher Deductibles
  • Biggest Strength: Low Monthly Cost
  • Biggest Drawback: High Out-of-Pocket Costs

High-deductible health plans are the most common plan design these days. There’s benefit to you in that you only pay for care you use – of course, the downside is that if you do need that care, don’t expect your insurance to cover it if your deductible isn’t met yet. If you have a high-deductible health plan through your employer, you may have the option to participate in a tax-sheltered health account. If you have that option, TAKE IT.  Not sure which to choose? Check our handy guide below.

Accessorize Your HDHP: Tax-Sheltered Health Accounts

piggy-bank-1270926_640HSA: Health Savings Account

  • Biggest Strength: Portability (the account and the money in it stay with you)
  • Biggest Drawback: Cost

If you have this option, it’s almost always a good idea. This is an account that belongs to you that you use to pay for health expenses – and the best part? That money isn’t taxed.  You contribute to it through monthly paycheck withdrawals up to a certain limit. Many companies offer to match your contribution up to a certain amount, which is something you should take advantage of, because it’s more tax-free income. The account follows you even if you change jobs.

HRA: Health Reimbursement Account

  • Biggest Strength: Cost
  • Biggest Drawback: Employer Contribution Limits (you only get so much $$ to spend)

This is an account your employer sets up for you and contributes a set amount of money that you can use on health expenses. This type of plan is usually cheaper than an HSA, but you can’t contribute money of your own and the account doesn’t travel with you if you leave your job. You use the money in the account to reimburse yourself for what you spend on health care, or you’ll get a credit card that withdraws the money directly from your reimbursement account.

FSA: Flexible Savings Account

  • Biggest Strength: Flexibility (can pay for health or dependent expenses)
  • Biggest Drawback: Use it or Lose it

You can contribute up to $2,550 to this tax-sheltered account. Be sure to read and understand the terms of your FSA carefully because most only let you carry over a small percentage of that total from year to year, if it carries over at all. Spend it if you’ve got it before the year rolls over! This is also an employer-owned account, like the HRA, so it doesn’t travel with you if you change jobs.

Cash-Pay: Your Ace in the Hole

credit-card-1080074_1280You don’t have to use insurance to pay for your healthcare. You always have the option to pay yourself. Many providers will offer a different price to patients who prefer to pay themselves rather than using insurance, so if it’s coming out-of-pocket, it’s worth checking on both prices. If you have an HSA, HRA or FSA, you can use those funds to pay for these out-of-pocket expenses.

A lot of time passes between when your doctor’s office submits an insurance claim and when your doctor gets reimbursed for services rendered – usually somewhere between 30 to 90 days. Sometimes, that claim is denied and your doctor isn’t reimbursed at all. This is why many practices are willing to offer patients paying out-of-pocket a better rate if you ask for it – at least they can count on getting paid.

NOTE:  Cash-pay doesn’t mean you have to pay in actual cash – usually, check or credit card works just fine too. Cash-pay is also known as “self-pay” or “out-of-pocket.”

If you’re paying for yourself, check out the MDsave marketplace to find the going rates for procedures in your area. You can buy your service up-front through the marketplace. Have a deductible? Check your insurer’s deductible eligibility requirements, and if your service qualifies, you can apply your MDsave purchase to your deductible.

MDsave: Out-of-Pocket Made Easy

You can use MDsave regardless of insurance coverage (or lack thereof) to find the best quality and prices in your area on out-of-pocket services. You can even use your HSA/FSA/HRA to pay for your procedure!

Here’s how it works:

  1. Search the MDsave marketplace by your procedure and ZIP code.
  2. Compare prices and providers near you.
  3. Pay one up-front, fully bundled price so you’ll never receive a surprise bill in the mail.

After your payment, you’ll receive a voucher for your service and your physician’s office will call to schedule your appointment. No insurance cards to pull out, no copay or coinsurance, the bill is taken care of before you walk in the door. Easy, right?

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