Do you understand healthcare insurance?
Most healthcare consumers, facing choices in insurance, are overwhelmed with confusing and ambiguous terms. Often, patients simply don’t have choices, but are left trying to understand their benefits. If you brave the long telephone wait for customer information, it isn’t unusual to get different answers to the same question. In an effort to help clear up some confusion, the following descriptions may be helpful.
The term HMO or health maintenance organization usually refers to a health insurance plan that is very restricted or managed. Usually, the PCP or primary care physician (your doctor) is responsible for overseeing all of your care. Any referrals to specialists, a lab, x-ray or tests must be requested by your PCP and often an authorization number or paper referral needs to be originated by your physician’s office.
This preauthorization process can occur in several ways. In some cases, the PCP must phone the request directly to your insurance company and receive an authorization number that you take to the specialist or lab. In other cases, a paper referral specific to your insurance must be filled out by the PCP, and that paper is then used by the specialist in billing for the service provided to you.
Generally, HMOs are more affordable. However, your choices are usually more limited and the services are carefully monitored.
PPO or preferred provider organizations are a cross between an HMO and more open-ended programs called indemnity plans. PPO plans have “in network” benefits similar to the HMO’s, with low copayments and no deductible for services received from a specific list of providers. But, you want to see a specialist who isn’t included on the list, you have the option of using your “out of network benefits,” Usually, the insurance will cover these services but you often have to pay a deductible and a percentage of the bill. For example, if you want to see a specialist not “in network”, you may have a $250 deductible and an 80%-20% split on the bill where the insurance company pays 80% and you pay 20%.
While PPO plans are usually more expensive, you aren’t locked into a specific geographic area for hospitalization or limited to a specific group of doctors. You have more flexibility. Often, going out of town for specific procedures is made easier with a more flexible plan.
In terms of rehabilitation services such as physical therapy, procedures for insurance coverage vary from plan to plan. Although Massachusetts is a “direct access” state, which means that a physical therapist can evaluate and treat patients without a physician’s referral, only a small number of insurances cover the services without a physician’s referral. Most plans require a “letter of medical necessity” or a prescription/referral from your doctor.
Remember that it is always best to know what your insurance plan covers, and what procedures you are required to follow before you need services. Take some time to review your plan with your agent, human resources office where you work or by calling the member services phone number shown on your insurance card.
In a future article, I will cover Medicare and different options for people over age 65.