Understanding Your Health Insurance Plan
Health insurance can be complicated to understand and use, but the plan document details all of the provisions of your coverage, including what is covered, what may be excluded, what your costs will be, the plan processes and obligations that both you and the plan have relating to the use of your insurance. This is a very important document, and it is crucial that you understand what your plan actually covers, and how it does so, before receiving healthcare. We will explore some of the key elements of insurance plans here, to help you better understand how to stay informed and advocate for yourself and loved ones.
Types of insurance
While understanding how your insurance plan covers the healthcare services you may need is something that you should explore when reviewing and selecting a plan, and is discussed in more detail here, a summary of each plan type is helpful to understanding the way that claims are processed, and perhaps denied. Many times, we will receive complaints that an insurer didn't pay for as much of a service as the individual thought they should, but after reviewing the person's plan, it becomes apparent that they simply misunderstood their financial responsibility for payment of services under the plan they enrolled in.
Health Management Organization (HMO): Under an HMO plan, people pay a monthly premium in for health coverage. HMOs typically require that you choose a primary care physician (PCP) to oversee your treatment and health needs. You also have a specific network of providers from which to obtain your care.
Preferred Provider Organization (PPO): Like an HMO, you have a network of providers from which to choose. If you get your care with providers in the network, your costs will be lower (though you will likely still have copays). However, if you choose a provider outside of the PPO, you will still receive a percentage of coverage, but the cost will be higher.
Point-of-Service Plans (POS): Some HMOs offer a POS plan. If your provider refers you outside of the HMO network, your costs are covered. If you refer yourself outside of the HMO network, your coverage may be denied or coinsurance required.
Summary Plan Description
The Summary Plan Description (SPD) is a short summary, usually only a few pages, that briefly details the coverage available under a plan, including limits and cost sharing for any category of benefits. It should include any deductibles, co-pays, co-insurance and more that apply to the plan, and distinguish between in-network and out-of-network benefits and cost sharing. This is a sample page from an SPD. In your SPD, you will see the cost for each category of service, dependent on its network status.
There is also a statement at the beginning of an SPD explaining what your deductible is, per individual and as a family, if there is a different deductible for in- and out-of-network care, prescriptions, etc. You should also be careful to read everything, especially if you have a family plan, because many plans may list an individual deductible, but have fine print stating that if two or more people are on the plan, the individual deductible doesn't apply. That would mean that if your plan summarizes your deductible as the following, you would need to pay for the first $3,000 of medical costs, not including Preventive Services, before the plan began paying benefits.
Individual Family
Deductible $1,500 $3,000
Understanding Formularies
A Formulary is a listing of the medications covered under your health plan, and how they are classified. Before you select an insurance plan, you should be sure that you know how any medications that you or anyone to be covered under the plan will be covered, and what your costs will be. The SPD will summarize how prescriptions are covered, and frequently include several tiers of coverage. Tier One is the least expensive option, usually including many generic medications instead of brand name. The SPD will detail what the co-pay or co-insurance for a medication in each tier will cost you, but be sure to remember that your plan may require you to satisfy your deductible before it will pay for these medications. Some plans even have specific deductible for the prescription benefit which is separate from the plan deductible. If your plan is designed in this way, you do not have to meet both - you only need satisfy the prescription deductible before the plan will pay, regardless of how much of the general benefit deductible you've met.
Most plans have the formulary available to view while you are comparing plans to enroll, and you can always ask an insurer, but understanding which tier any medications you need to take are in will help you better understand what your actual costs will be for the plan. Some people may prefer brand name medications, but those might be in Tier Two or Three, depending on their needs, which can be much higher cost.
Provider Networks
Finally, make sure that the provider(s) you see, and wish to continue to see, accept the specific plan you're considering. Each insurer is required to have an accurate and current list available online for people to review the providers and hospitals that are in network for each plan. It is important to remember that each insurer has many different health insurance plans, and not all will have the same network of providers. You should confirm with the plan, either in the provider directory, or Customer Service, that your provider and hospitals are in network for the plan you have or are considering, as well as confirming with your provider.
Finally, when you confirm any of this information with someone, especially as a part of the process to determine which plan to enroll in, it is very helpful to document who you spoke with, when and what they said. That way, if there is a problem afterwards, it is easier to confirm that you did what you needed to ensure your plan was appropriate.