Just like you should see your doctor at least once a year for a checkup, it’s a good idea to take a look at your health insurance on an annual basis and make sure you’re getting the coverage you need for you and your family. The period at the end of the year is often the perfect time to take stock of your health insurance. For those who have insurance through the Health Insurance Marketplace or Medicare and for many who have employer-based coverage, open enrollment – the time period in which you can make changes to your plan – occurs toward the end of the calendar year. However, some employer-based plans will offer an open enrollment period during another part of the year, so be sure to check with your human resources office to find out when your open enrollment period takes place.
Why Have Health Insurance?
Like other forms of insurance, health insurance is based upon the principle of spreading risk across many people. People pay into their insurance plans through a monthly premium. If your coverage is through your employer, your insurance premium is likely deducted from your paycheck, before taxes, each month. By collecting premiums from a large population of customers, the insurance company has the resources to pay for its customers’ health care expenses.
Some may question the need to have health insurance, especially those who are young and healthy. After all, for the people who only see a doctor when they come down with a sinus infection and only need the occasional prescription, wouldn’t it be cheaper to just pay out of pocket and skip insurance altogether? It’s not recommended.
“Anyone who goes without health insurance is taking a tremendous financial risk,” explains Dr. Larry Tatum, CEO of Privia Medical Group North Texas. “The purpose of all insurance is so that we are prepared for the unexpected. True, your periodic upper respiratory infection may not seem like a good reason in and of itself to pay for health insurance each month. But if you are suddenly diagnosed with cancer or suffer a serious injury – events we hope never happen – then at least you have the peace of mind knowing you will not have unexpected challenges paying medical expenses.”
Health Insurance Glossary
The world of health insurance seems to have its own language. Here’s a look at some of the common health insurance terms and acronyms every consumer should familiarize themselves with:
- Network: A network is a group of health care providers that have established business relationships with an insurance company. This includes physicians, labs, hospitals and others. The provider’s contract with the insurer stipulates the amount the provider will be paid by the insurance company. Your insurance company wants you to use providers in its network because it will cost less. The insurer incentivizes you to do this by making it cheaper to see a provider in-network through a less expensive co-pay. Some patients will choose to see a provider out-of-network if they believe that’s the best health care available for their situation. In other instances, such as a medical emergency, it may not be practical to get to an in-network provider in a timely manner.
- Premium: This is the amount you pay each month to maintain your health insurance coverage. Premiums can be influenced by several factors: age, geographic location, the type of plan, whether or not the plan will cover dependents and finally, tobacco use. Many health insurance plans now assess a surcharge or premium for smokers and other users of tobacco products. Insurers may not charge higher premiums or reject coverage based on gender, medical history or pre-existing conditions.
- Deductible: This is the sum you pay out-of-pocket before your insurance company begins to pay your claims. It is generally a fixed dollar amount each year.
- Co-pay/co-insurance: This is the amount you pay at each visit to a health care provider. This is a fixed dollar amount, or in some cases, a percentage of the total bill. There are co-pays for visiting a doctor, a specialist, getting an x-ray, having lab work done, filling a prescription, getting hearing aids, using an ambulance and going to an urgent care clinic or emergency room. Remember, your co-pay to see an out-of-network provider is typically more expensive than when seeing an in-network provider. The provider will usually collect your co-pay at the time of your appointment.
- HMO (Health Maintenance Organization): HMOs are insurance plans in which enrollees can only see providers who are part of the HMO’s network. A visit to an out-of-network provider will not be covered, except in cases of medical emergency or if the insurer has agreed in advance that it is a medical necessity.
- PPO (Preferred Provider Organization): This type of health insurance plan allows enrollees to see out-of-network providers, though usually at a greater out-of-pocket cost. There are also fewer restrictions on seeing specialists without a referral from a primary care provider.
- EPO (Exclusive Provider Network): This plan has some characteristics of both HMOs and PPOs. As with an HMO, there is generally no coverage for out-of-network providers. But like PPOs, EPOs do not require you to first get a referral from a primary care doctor before seeing a specialist.
- PCP (Primary Care Provider): The PCP is usually a doctor of family medicine, internal medicine or obstetrician/gynecologist. PCP is an important term for insurance purposes; your insurance company will want to make sure you have one and will sometimes require a referral from your PCP before you can see a specialist.
- EOB (Explanation of Benefits): Your insurer will send you an EOB after you’ve used your health insurance. The EOB will explain what the total charges were, how much your insurance covered and what amount, if any, you may still owe to the provider. The EOB is not a bill.
- Prior Authorization: In some cases, your physician may need to obtain prior authorization from your insurance company for a medical procedure, screening or prescription drug. The physician may need to explain to the insurance company why the request is medically necessary and why it should be covered.
- Preventative Services: These are health care services that are available to consumers and do not require a co-pay or co-insurance; they are fully covered by the insurance plan. This includes services such as flu vaccines, some screening tests and wellness visits.
Where Do You Get Health Insurance?
People obtain health insurance in a variety of ways:
- Your employer: This is the traditional way most non-seniors in America have health insurance. You select a plan offered by your employer and you pay a premium that is deducted from your paycheck, before taxes. Generally, the employer pays a share of the employee’s coverage and in some cases, a share of the employee’s family members’ coverage.
- The Health Insurance Marketplace: The Marketplace is an option for American citizens under 65 to purchase health insurance. People generally use this option if coverage is not available through their employer. Some plans have low premiums and high deductibles, which could make sense for younger, healthy people who don’t have a lot of medical needs. Other plans are more expensive but cover more, which make sense the older you get. Some enrollees may qualify for a federal income tax credit when they enroll, depending on income. Marketplace open enrollment for 2020 runs from November 1 to December 15, 2019. Visit healthcare.gov for more information.
- Association Health Plans: AHPs may be an option for small businesses to band together and offer coverage to their employees as an employer group or business association. They are generally formed when businesses in a like industry or geographical area work together to offer coverage. The U.S. Department of Labor issued new guidelines in 2018 intended to expand the availability of AHPs.
- Medicare: This is the federal health insurance program for American citizens age 65 and older. People who are approaching the age of 65 should visit medicare.gov for enrollment information. Some people are automatically enrolled at age 65, while others need to enroll themselves. There are three main components of Medicare:
- Medicare Part A is known as hospital insurance, covering hospital stays and some long-term care needs.
- Medicare Part B is medical insurance, covering physician visits and medical screenings and labs.
- Medicare Part D is a prescription drug insurance program.
Some people choose to delay enrollment in Medicare Parts B and D if they are still working and have health insurance through an employer that they prefer to keep. However, a late enrollment penalty may apply.
- Medicare Advantage: These are private plans that some seniors choose to purchase to supplement the coverage provided by Medicare. Medicare Advantage plans are offered by private companies but must be approved by Medicare. Those with a Medicare Advantage plan still have Medicare coverage, but they receive their benefits through the plan directly, not traditional Medicare.
The purpose of Medicare Advantage plans is to provide additional coverage beyond that provided by traditional Medicare. These added benefits may include dental, hearing and vision coverage. Out-of-pocket expenses vary between Medicare Advantage plans, as do the provider networks they offer. For these reasons, it is important to compare Medicare Advantage plans just as you would employer-based plans, taking into account a variety of factors.
For Medicare Part D and Medicare Advantage, you can make changes to your plans and switch plans during an open enrollment period that runs from October 15 – December 7, 2019.
You can also disenroll from a Medicare Advantage plan between January 1 – March 31, 2020.
- Veterans Administration: Veterans of the United States Armed Forces may be eligible for health benefits through the VA, depending on a variety of factors, including length of time served, discharge circumstances, income and service-connected disability rating. For more information, visit VA.gov.
- Tricare: Tricare is health insurance for active-duty military personnel, as well as some military retirees. For more information, visit Tricare.mil.
- Medicaid and CHIP: Medicaid and the Children’s Health Insurance Program (CHIP) primarily serve lower-income families. In Texas, Medicaid eligibility is usually limited to children and women who are pregnant. CHIP is available for some families who earn too much to qualify for Medicaid. Visit healthcare.gov or the Texas Health & Human Services Commission.
Selecting a Plan
If you have employer-based health insurance or will be shopping for insurance in the Health Insurance Marketplace, you will likely have a few options to choose from. You may have a choice between an HMO, a PPO or an EPO. Carefully evaluate the differences between these options. An HMO may be less expensive but may also provide fewer benefits or not allow you as many provider options. On the other hand, if you are relatively young and healthy, a less-expensive plan may be right for you. Similarly, on the Health Insurance Marketplace, you will find a variety of plans at varying costs. These plans are named after metals – bronze, silver, gold and platinum. You’ll pay the least for bronze and also get the fewest benefits; at the other end of the scale, platinum is the most expensive but provides the most comprehensive overall coverage.
When comparing plans, be sure to consider three separate cost factors:
- Premium: the amount you pay each month to maintain coverage.
- Co-pay/co-insurance: the amount you will pay each time you visit a provider or get a prescription filled.
- Deductible: the amount you must pay out-of-pocket each year before your health plan begins to cover the cost of medical services.
You may find a plan with a low premium but later discover you have to meet a high deductible before you benefit from any coverage from the plan. You may also find that your co-pay for each visit, procedure or prescription is higher than you expected. For some people, these low premium/high-deductible plans work just fine; just make sure you have all the facts before making a decision.
An additional tool some employers offer for people who opt to enroll in a high-deductible plan is a health savings account (HSA). This is essentially a medical savings account that people can contribute pre-tax income to and then spend later to cover deductibles and other out-of-pocket costs.
The Texas Department of Insurance has a helpful tool and checklist on its website to help consumers who are trying to select a new health plan.
Understanding an insurer’s network is critical to making a decision about a health insurance plan. No matter what type of plan you select, you will pay higher out-of-pocket costs to see a provider who is not in your plan’s network. Whenever possible, you want to stay within your network to keep costs down and you definitely want to make sure your primary care provider and any specialists you see are in your plan’s network. Health insurance plans usually have a directory of providers on their website. Privia Medical Group North Texas providers are in-network for most major insurance plans in North Texas.
All insurance plans, including HMOs, PPOs and EPOs, are required to maintain adequate networks for their customers. Network adequacy in Texas is regulated by the Texas Department of Insurance (TDI). If you believe your insurance provider is not meeting adequacy or other requirements, you can file a complaint with TDI. TDI regulates the private health insurance market in Texas and does not have jurisdiction over Medicare, VA, Tricare or most aspects of the Health Insurance Marketplace.
Insurance: We all Need It
We all need health insurance and we want to get the coverage that will give us the most benefit that we can afford. If you have a choice of health plans, it pays to do research and compare your options. It can be time-consuming but understanding your coverage and how it works will come in handy at some point down the road.
“Health insurance can be quite confusing, even for those of us who have to deal with it every day,” says Dr. Tatum. “Privia providers have experienced administrative staff who work hard to facilitate insurance benefits on behalf of our patients. To better serve our patients, we have in-network agreements with most of the major health plans in North Texas. That’s a big advantage for both our patients and our physician members.”