Understanding Health Insurance

Health insurance is usually complicated, and we often encounter many kinds of difficulties. You may not know how to choose the right insurance company and insurance plan, how to choose a doctor, what doctors you can see, which specialist I need for your symptoms, and how do I do the claims. We're here to help!

The health plans come in four metal tiers.
They have different costs for premiums and services — but the same great benefits.

4 Major Types of Healthcare Organizations：

Health Maintenance Organization，(HMO）；
Preferred Provider Organization，(PPO)；
Exclusive Provider Organization，(EPO）；
Point-of-Service， (POS) .

HMOs

(Health Maintenance Organizations)

The insurance premium of the HMO insurance plan is relatively cheap, and the proportion of out-of-pocket expenses after seeing a doctor is also low.

The downside of HMOs is that you have fewer choices for doctors. Each HMO has its own network of doctors and hospitals. Members must seek medical treatment within the medical group in order to be covered, except for emergency cases. If the member seeks medical treatment at a hospital or clinic outside the HMO's designated network, all costs must be paid out of pocket.

After becoming an HMO member, the insurance company will require the policyholder to designate a doctor as your primary care physician (PCP). A PCP doctor is usually a family doctor, internist, or pediatrician. Every time a patient sees a doctor, he must go to the designated doctor first.

The advantage is that the health insurance doctor is more familiar with the overall health status of the insured. The disadvantage is that patients must be referred by a PCP before they can see a specialist or be hospitalized for treatment, which sometimes delays treatment.

HMOs are for policyholders who want affordable health insurance.

PPOs

(Preferred Provider Organizations)

Preferred Provider Organization is a type of plan that negotiates with doctors and hospitals to obtain preferential medical service prices and provides them to PPO members.

After participating in PPO plans, members can choose a doctor's clinic from the list. When visiting a medical institution within the network, the insured can directly make an appointment with the in-network family doctor's clinic or specialist's clinic without prior approval from the medical group or insurance company, and the insurance company will pay the medical expenses according to the plan.

PPO members can also choose out-of-network providers, but it will cost much more and is relatively high, and the proportion of medical expenses cost to member has no limit and usually set by the insurance company.

The advantage of PPO is that the member does not need to appoint a family doctor, nor does he need to be referred by a health insurance doctor to see a specialist.

Insurance premiums for PPOs are usually higher than for HMOs.

EPO

(Exclusive Provider Organizations)

Exclusive Provider Organizations usually require members to seek medical treatment within the medical service network designated by the insurance company, and the insurance does not reimburse members for medical treatment outside the medical group. Some EPO insurance may reimburse emergency services under special circumstances according to specific circumstances, but there is no guarantee that they will be reimbursed.

After participating in the EPO insurance plan, there is generally no need for a designated family doctor (Primary Care Physician), and no referral is required when seeing a specialist.

The insurance premium of the EPO insurance plan and the medical expenses shared by the patient (self-payment, co-insurance, etc.) are relatively low, and it is a relatively cheap insurance plan. However, the EPO insurance plan only reimburses medical expenses within its medical group, and does not reimburse medical expenses incurred outside the network. When seeing a doctor or doing an examination, the insured should first check with the relevant hospitals, clinics, laboratories, etc. whether they belong to the medical service network designated by the insurance plan.

Health Insurance Terms

Copayment

A fixed amount ($20, for example) you pay for a covered health care service after you've paid your deductible.

Let's say your health insurance plan's allowable cost for a doctor's office visit is $100. Your copayment for a doctor's visit is $20.

If you've paid your deductible: You pay $20, usually at the time of the visit.
If you haven't met your deductible: You pay $100, the full allowable amount for the visit.

Copayments (sometimes called "copays") can vary for different services within the same plan, like drugs, lab tests, and visits to specialists.

Generally plans with lower monthly premiums have higher copayments. Plans with higher monthly premiums usually have lower copayments.

Deductible

The amount you pay for covered health care services before your insurance plan starts to pay. With a $2,000 deductible, for example, you pay the first $2,000 of covered services yourself.

After you pay your deductible, you usually pay only a copayment or coinsurance for covered services. Your insurance company pays the rest.

Many plans pay for certain services, like a checkup or disease management programs, before you've met your deductible. Check your plan details.
All Marketplace health plans pay the full cost of certain preventive benefits even before you meet your deductible.
Some plans have separate deductibles for certain services, like prescription drugs.
Family plans often have both an individual deductible, which applies to each person, and a family deductible, which applies to all family members.

Generally, plans with lower monthly premiums have higher deductibles. Plans with higher monthly premiums usually have lower deductibles.

Co-Insurance

The percentage of costs of a covered health care service you pay (20%, for example) after you've paid your deductible.

Let's say your health insurance plan's allowed amount for an office visit is $100 and your coinsurance is 20%.

If you've paid your deductible: You pay 20% of $100, or $20. The insurance company pays the rest.
If you haven't met your deductible: You pay the full allowed amount, $100.

Example of coinsurance with high medical costs

Let's say the following amounts apply to your plan and you need a lot of treatment for a serious condition. Allowable costs are $12,000.

Deductible: $3,000
Coinsurance: 20%
Out-of-pocket maximum: $6,850

You'd pay all of the first $3,000 (your deductible).

You'll pay 20% of the remaining $9,000, or $1,800 (your coinsurance).

So your total out-of-pocket costs would be $4,800 — your $3,000 deductible plus your $1,800 coinsurance.

If your total out-of-pocket costs reach $6,850, you'd pay only that amount, including your deductible and coinsurance. The insurance company would pay for all covered services for the rest of your plan year.

Generally speaking, plans with low monthly premiums have higher coinsurance, and plans with higher monthly premiums have lower coinsurance.

Out-of-pocket maximum/limit

The most you have to pay for covered services in a plan year. After you spend this amount on deductibles, copayments, and coinsurance for in-network care and services, your health plan pays 100% of the costs of covered benefits.

The out-of-pocket limit doesn't include:

Your monthly premiums
Anything you spend for services your plan doesn't cover
Out-of-network care and services
Costs above the allowed amount for a service that a provider may charge

The out-of-pocket limit for Marketplace plans varies, but can’t go over a set amount each year.

For the 2023 plan year: The out-of-pocket limit for a Marketplace plan can’t be more than $9,100 for an individual and $18,200 for a family.
For the 2022 plan year: The out-of-pocket limit for a Marketplace plan can’t be more than $8,700 for an individual and $17,400 for a family.

Example

2023 Silver 70 Plan:

PCP Copay: $45
Specialist Copay: $85
Emergency Room：$400
Deductible： $4,750
Co-Insurance： 30%
Out of Pocket：$8,750

The total cost depends on the plan and the type of treatments used.