All health insurance plans have some benefits that won’t be important to the majority of people and therefore, should be ignored when comparing various plans. Understanding the 4 key parts of all PPO health insurance plans will make it easy to know when you’ve got a plan that will fit your specific health insurance needs. The 4 key parts are:
- Office Visit Co-pays
- Deductible Amount
- Out-of-Pocket Maximum
- Prescription Benefits
Office visits are the most commonly used benefit in health insurance plans, and are one of the benefits that the insurance companies use to differentiate low cost plans from medium and high cost plans. The Insurance companies offer plans with 0 to unlimited office visits for a simple copay of $30-$50. Therefore, if you only go to the doctor for your preventive screenings, then a plan that offers only 0 to 2 office visits would be a better choice for you. If you have children that visit the doctor 2-3 times per year for colds or injuries, then a plan that offers 3 office visits would be a better choice. As of January 1st, 2011, all new health insurance plans are required to provide Preventive Services (office visits and labs tests) for zero cost, and these preventive visits should not count as one of your regular office visits.
Deductibles are the medical costs you are required to pay before the insurance company begins to pay for any non-preventative benefits you use. As an example, let’s say you have a PPO plan with a $3,000 deductible. If your child breaks an arm and you take them to an urgent care center where they receive treatment, and the insurance company’s negotiated rates at the Urgent Care center total up to $2,200, then you would be responsible for the $2,200 as part of your deductible. If your other child broke an arm later that year and had exactly the same costs at the Urgent Care center, then you would pay $800 as the last part of your deductible, and the Insurance company would begin paying for part of the remaining $1,400 in costs.
Once you reach the deductible amount in any year, the Insurance companies begin sharing the cost of any additional expenses, with you paying 20-50% and the Insurance company paying the rest. This cost-sharing, or Co-Insurance, continues until you have paid an amount equal to the Out-Of-Pocket Maximum. This is the total amount you would pay in any year if something major was to happen. For most people, the Out-Of-Pocket Maximum should not be a primary decision factor because the likelihood of having a major medical event happen is fairly small.
The last key area is the prescription drug benefit. The 3 common drug benefit options are Generic Only, Generic and Brand Name , and no prescription benefits. Plans that offer Brand Name prescription coverage will typically have a separate deductible for the Brand Name prescriptions, and at the beginning of the year you will be paying for your Brand Name prescriptions until you reach the prescription deductible, then you will have a copay for additional Brand Name refills. It is usually a good idea to have a plan with both Generic and Brand Name benefits, but these plans will cost more than plans offering only Generic coverage.
With a good knowledge of how these 4 keys components work, finding and analyzing health insurance plans will be much easier. After all, who wants to spend a lot of time looking for health insurance. If you have any uncertainty, or just want someone to give you a hand, then give us a call and we’ll be happy to help you.