Focused health insurance industry terms
Often, health insurance companies use technical terms that may be unfamiliar to you. This can make selecting the perfect health plan difficult. We define these terms so you can continue making well-informed decisions regarding your healthcare.
Refers to a broad and constantly changing array of health plans that attempt to manage the cost and quality of care. Ideally, managed care brings about a comprehensive healthcare system where you receive the care you need – including preventive care – when you need it and in the most cost-efficient manner possible. The three most common "managed" health insurance plan choices are: health maintenance organization, point of service, and preferred provider organization. You have another option, which is commonly called traditional, indemnity or fee-for-service insurance, as well.
Health maintenance organizations (HMOs)
HMOs emphasize prevention and offer a select choice of doctors and hospitals. You select a primary care doctor who coordinates all of your medical care including referrals to a specialist and hospital care, if necessary. You may also have minimal co-payments for office visits, allergy shots and other services. An HMO option is easier on your budget since you have minimal out of pocket and unexpected expenses – as long as you receive all medical care through the HMO.
Point of service plans (POS)
These plans are similar to HMOs, except there is an option to seek medical care from a specialist without needing a referral from your primary care doctor. In this case, you may have reduced benefit coverage, meaning you may have to pay more out-of-pocket costs to receive specialty care without a referral. If you pick a specialist or hospital that is on the plan's "preferred" list, you will usually have some co-insurance in addition to a co-payment. If you pick a specialist or hospital that is not "preferred" by the plan (or out-of-network), you will usually have higher co-insurance in addition to your co-payment. Most POS plans cover preventive care, as well.
Preferred provider organizations (PPOs)
PPOs have fewer restrictions in accessing providers than with other plans. You can pick any doctor, hospital or service you want. If the provider is "preferred" by the plan (in-network), you pay a lower co-payment and co-insurance – depending on your plan design. If you choose a doctor or hospital that is out-of-network, then you will have higher co-payments and co-insurance. You may also be billed for any amount charged that the plan does not consider reasonable. In other words, you may opt to use a PPO provider and receive maximum reimbursement and benefits or, seek medical care from a non-PPO provider and receive reduced reimbursement and benefits.
Traditional, or indemnity, insurance
This type of insurance may not cover preventive services; however, you may see any doctor or hospital because there is no network or plan list. With indemnity, you will pay an up-front deductible before there is any reimbursement by the insurance company. Typically, you must complete the claims paperwork. Usually, traditional or indemnity insurance is the most expensive option for health plan coverage.
The amount plan members pay out-of-pocket for medical services. The payments usually constitute a fixed percentage of the total cost of a medical service covered by the plan; for example, if a plan pays 80 percent of a health bill, the patient pays the remaining 20 percent as co-insurance.
The sum of money that an individual must pay out-of-pocket for medical services before the health plan pays its portion. Deductibles are usually per person, or per family, per calendar year; for example, an individual may have a $200 deductible whereas a family may have a $400 deductible.
Medicaid and Medicare
Medicaid is a program jointly-funded by the state and federal government to provide medical aid for people who are unable to finance their medical expenses. North Carolina, South Carolina, and Virginia are among many states offering a Medicaid HMO for this population.
Medicare is a federal health insurance program for older Americans and eligible disabled individuals.
Preventive care is an approach to healthcare that emphasizes preventive measures and health screenings such as routine physicals, well-baby care, immunizations, diagnostic lab and X-ray tests, pap smears, mammograms and other early detection testing. The purpose of offering coverage for preventive care is to diagnose a problem early, when it is less costly to treat, rather than late in the stage of a disease when it is much more expensive, or too late, to treat.
Primary care doctor
These specialized doctors provide a full range of healthcare services to individuals and generally coordinate and manage the care of HMO patients. Family medicine doctors, general internal medicine doctors, and pediatricians are recognized by managed health plans as primary care doctors. Some HMOs recognize obstetrician / gynecologists as primary care doctors.
If you have additional questions, contact the Novant Health hospital closest to you.