The ABC’s of health insurance
HMO, PCP, PPO, POS — feel like you’re wading through alphabet soup? Read on for translations of common terms.
• Health maintenance organizations (HMO) require you to choose a primary care physician (PCP), who coordinates all of your care, including visits to specialists.
• Preferred provider organizations (PPO) let you make your own choices from a network of preferred providers (in some plans, you can pay a higher fee for out-of-network care) and may not require you to have a primary care physician.
• Point-of-service plans (POS) let you choose between receiving care from participating providers (you’ll be reimbursed more for this), or non-participating providers(you’ll be reimbursed less for this).
Some plans offer lower premiums (monthly payments) in exchange for a higher yearly deductible (the amount you must pay personally before insurance provides any coverage). Some plans require co-pays, a set fee you pay for health care visits or medications. Others ask you to pay co-insurance, which means you’re responsible for a portion (20 percent, for example) of eligible expenses charged by a provider or the amount the insurer agrees to pay for specific services.
Many plans require preauthorization or precertification for certain services, such as surgery or visits to a specialist. Some pick up the tab on preventive care services, such as flu shots, cholesterol tests, or colonoscopy. Most have formularies that list pre-approved, commonly prescribed drugs.
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