Open enrollment is wrapping up, and many of you have enrolled in brand new health coverage plans. Now, you may be looking to your plan documents for information on the benefits, cost-sharing, and coverage limits of your plan. Plan documents are provided by all health plans when you enroll, change plans, or upon request. As you make your way through these documents, which are sometimes called a “Summary of Benefits and Coverage”, there are a few terms that will be important to learn.
First, make sure that you know what kind of health insurance plan you have. On your ID card you might see the terms HMO, PPO, or POS. These types of providers are popular in the marketplace, so it’s important to know exactly what insurance structure they use. Health maintenance organizations (HMOs) require you to pay a monthly premium in exchange for access to an assigned network of providers. They will not pay for out-of-network services unless it is an emergency.
Alternatively, preferred provider organizations (PPOs) gives you access to a wider range of providers. You get in-network services at a lower cost (co-pay or deductible), and you can still get coverage if you see an out-of-network provider. PPOs are more comprehensive than HMOs because you can seek out-of-network care, but that flexibility and access comes at a higher premium cost and/or with additional fees.
A point of service (POS) plan combines the features of HMOs and PPOs. Like an HMO, you have to use an assigned primary care doctor that is in-network. Like a PPO, you can get coverage for out-of-network services, even though those services will cost more than if you went to an in-network provider.
Learn more about health insurance plan and network types here.
Next, you want to know what your health coverage will cost. There’s more to insurance costs than the monthly bill you pay to the insurance company. This premium amount has nothing to do with the other “out-of-pocket” costs associated with health insurance:
- Deductible— how much you have to spend on covered health services before the insurance company starts to pay
- Copayments — once your deductible has been met (or sometimes immediately when you enroll), you have to pay these set fees for covered services
- Coinsurance— once you meet your deductible, this is a percentage of costs that you will pay for covered services (e.g. if your coinsurance is 30% and the service costs $100, the insurance will pay $70 and you will pay $30)
- Out-of-pocket Maximum — this is the most you will ever have to spend on medical services during a plan year. Once you reach the maximum, insurance will pay 100% for covered services
- Usual, Reasonable and Customary Fees —these are out of pocket fees that are based on the price range that doctors in your area are charging for certain services
If you bought your plan from the Connect for Health CO marketplace, then you can be sure that it meets ACA requirements. If you did not purchase from the marketplace, check your plan documents to ensure your plan meets the following standards:
- Covers minimum essential benefits
- Access to key services like preventative care at no cost-sharing
- Cannot refuse clients based on health status
- Cannot exclude pre-existing conditions from covered benefits
- Minimum level of coverage (i.e. covers at least 60% of total average costs for covered benefits)
- Limits on out-of-pocket costs
- Covers young adults up to age 26
- Network adequacy (i.e. sufficient access to providers)
Learn more about these standards here: ACA Consumer Protections for Private Coverage
Don’t give up hope if you find the world of health insurance confusing! You are not alone. Even this New York Times article talks about how many people struggle with understanding insurance terms and choosing a health plan. Luckily, free professional advice is out there. And, you can always call CCHI with questions at 303-839-1261, or email us at [email protected].