The following are definitions of key terms that you will need to understand your current and any proposed health plan.
Types of Health Plans
HMO = Health Maintenance Organization. Doctors & Hospitals agree to participate in the health plan and to accept contracted payments from the health plan. The medical practices can either share medical facilities ("group or staff") or work independently ("IPA"). They can be self-employed or employed by the health plan. PCP = A "Primary Care Physician" can provide treatment themselves or can refer the patient to a participating specialist.
EPO = Similar as HMO except no PCP. Patient can utilize any participating physician & hospital including PCPs and "self refer" to participating specialists etc.
POS = Point of Service. At the time of delivery of medical service, patient can decide to either go to an in-network participating provider, or out-of-network.
NGP POS = Non Gate-Keeper POS. Same as POS except visits to in-network specialists can occur without a "referral form" from the PCP.
PPO = Preferred Provider Organization. Similar to POS in that there are in-network and out-of-network services, but like the EPO, no PCP is selected. Patient can utilize any participating physicians & hospital including PCPs and "self refer" to participating specialists etc.
INDEMNITY Plan = Traditional insurance, with no network or participating physicians and hospitals. Patient either files claim forms for reimbursement, or provider accepts "assignment" and waits to collect directly from Insurance company.
Health Plan Operational Terms
IN-NETWORK = Doctors and Hospitals and other medical "providers' participate in health plan's "network", and contract with the health plan to accept preset discounted fees for services or monthly "capitation" payments.
OUT-OF-NETWORK = Claims for reimbursement for medical/hospital services are sent to the insurance company either by the insured after payment to provider, or directly by medical/hospital provider that "accepts assignment" Deductibles and Coinsurances apply.
DEDUCTIBLE = A preset amount of money each year (ex. $250 per person in family) that must be paid before the insurance company reimburses for medical expenses. Usually maximum of 3 family members must pay a deductible.
CO-INSURANCE = A preset percentage of the medical/hospital expenses that the insurance company and the patient pays. Usually either 80/20% or 70/30%.
STOP-LOSS = A present amount of medical/hospital expenses that the coinsurance applies to (ex. 80/20% of $5,000) after which the insurance company reimburses 100%.
COINSURANCE MAX = A present amount of money that the patient pays ex. the 20% in a 80/20% coinsurance with a $5,000 stop loss, equals $1,000 coinsurance maximum.
COPAYS = DOCTOR/SPECIALIST: Payments to in-network Providers (ex. $10/visit) PRESCRIPTION: Payments to In-network (ex. $5 generic, $10 brand) HOSPITAL: Payments to In-network hospitals (usually 0, but can be $100 or $500 etc.)
BRAND NAME VS GENERIC RX = Before the drug loses its patent (in 17 years) it is "brand", afterwards it is called "generic". Usually generic is same formulation as brand.
PREMIUM = Cost of the insurance payable to the insurance company. Employee may share in this cost although billing is sent to the employer.
POLICY HOLDER = usually the employer that signs the group insurance contract
INSURED = The covered employee and their dependents who have enrolled in the plan