What is the difference between health insurance coverage from an HMO, a PPO, an EPO, or a POS? Which should I choose? Which one does my doctor belong to? It all seems pretty confusing at times, but no worries! We’ve already learned when you can sign up, now we’ll learn more about what you can choose. Today we’ll get you started on understanding what’s what in all this official alphabet soup.
Basically, it’s all about which doctor belongs to what organization and how much of your care that organization will pay for (willingly). ‘Providers’ is the word they use for the doctors, hospitals, and clinics that belong to their ‘network’ or ‘group’. Each insurance company has their own provider network, so you probably would want to find out what company’s networks your doctor is with before signing any contracts. You may also want to ask if the company will cover any specific drugs or health treatments you need if you have a chronic illness, and see if you’re happy with the choices they give you.
If you have any special needs, or a child with special needs, you need to ask about those special needs in particular to be sure that they will be covered, and by whom. The term that applies here is ‘habitation services’.
In some ways the features and differences of the different organizations may seem to overlap.
- Health maintenance organizations (HMOs) only cover care provided by doctors and hospitals inside their network. HMOs often require members to get a referral from their primary care physician in order to see a specialist.
- Preferred provider organizations (PPOs) cover care provided both inside and outside the plan’s provider network. Members usually pay a higher percentage of the cost for out-of-network care (20% as compared to 40%, for instance). Some PPOs require referrals, some don’t.
- Exclusive provider organizations (EPOs) are a lot like HMOs: They generally don’t cover care outside the plan’s provider network. Members, however, may not need a referral to see a specialist.
- Point of Service (POS) plans vary, but they’re often a sort of hybrid HMO/PPO. Members may need a referral to see a specialist, but they may also have coverage for out-of-network care, though with higher cost sharing.
Although insurers identify plans by type in their plan coverage summaries, one may offer very different out-of-network coverage than another, although they use the same letters to describe their plan. These are the three basic questions to ask:
- Is there out-of-network coverage?
- Does that out-of-network spending count as part of my deductible? (Legally it doesn’t have to, but some plans include it.)
- Do I need a primary care physician as a ‘gatekeeper’ who must approve any visits to a specialist?
Requiring referrals is one way that insurance companies save money. They don’t think that most people know when they need a specialist or not, or which specialist to see. Seeing a specialist can cost four times as much as seeing your GP (general practitioner). In most cases a GP can take care of whatever ails you, but when they can’t it can be very frustrating to be denied a visit to a specialist by an unwilling GP. Most doctors willingly refer out when necessary, it’s very rare to deal with one that won’t. That said, doctors can lose their ‘preferred provider’ status if they routinely order too many tests or make too many referrals.
A doctor who doesn’t order a lot of tests all the time isn’t always a bad thing. Unnecessary tests are expensive and can be hard on you physically. The proverb that applies here is ‘When you hear hoofbeats think horses, not zebras.’ In other words, whatever you have is most likely not something exotic you found on Google, and will get better with fairly simple treatment.
Sometimes providing the best care puts a doctor between a rock and a hard place. Insurance companies don’t like spending what they see as unnecessary money. On the other hand, some patients expect doctors to wave a magic wand and fix everything but won’t actually cooperate with the treatment plan. Be nice to your doctor, he/she’s got it tough.
Before making a choice of what insurance plan to buy, definitely talk to your doctor’s billing department as well as your doctor. Some companies are known for slow pays and/or not approving needed care and doctors won’t accept their members.
Whew…. Ok, so next we’ll talk about your state marketplace. What subsidies and cost sharing plans do you qualify for according to your income?