HMO · PPO · HSP · EPO · MSP · POS · HSA · Indemnity
and Student Health & Worldwide Travel Health Insurance
Please contact us via phone, fax or email for a no obligation quote: 1.800.482.5347.
NOTE: Much of what follows is meant to show you the historical factors that existed PRIOR TO the “Affordable Care Act” (“Obamacare”), much of which no longer applies due to newer Legislative actions under this newer Health Care Law, but does serve to show the knowledge and expertise that has been part of our practice for well over 32+ years. Please see HERE for the most current requirements for Health Insurance, both for Employer Groups and for Individuals and Families under the ACA (“Obamacare”).
Health Insurance – An Overview of Plan Types:
The marketplace for health insurance coverage has continued to evolve as the costs for health care spiral ever higher…and so have available Health Insurance Plans.
The volatile market and issues seem to center on creating ever newer plans that strike a balance between benefits (some mandated by State or Federal law, and others not) and costs.
Historically, Insurers best method for getting at the cost side of the equation is to employ the required use of doctor and hospital discounted fee Networks, where pricing and other service protocols can be measured, and where negotiated discounts can be achieved. The benefits within these plans are either richer or poorer depending on where medical services are received by the end user consumer – either in Network or out of Network.
A newer, and perhaps more novel approach, is to put the decision in the consumers hands by having them negotiate provider prices at the point of purchase – this can occur through the use of Indemnity, PPO, POS or HSA types of health plans (see below). The believed positives to come out of these types of plans are that if consumers become more directly involved in the cost for benefits received equation, then costs will come down for everyone. Particularly, medical providers, who are for profit businesses, will want to attract and retain clients to pay their operating bills and to generate income, and will therefore tend to work harder to find workable pricing arrangements to secure the business of discerning consumers who, now that they are more directly responsible for the payment, will shop both skills and costs before writing a check for services.
Regardless of the type of Insurance coverage, the solution to controlling spiraling costs persists. Consumers can ill afford to be without some form of coverage, as the liabilities are simply too great to bear.
Now, let us look at an overview of the available types of Health Insurance Plans.
The Predominant Types of Health Insurance Plans Are:
HMO (Health Maintenance Organization) – where your care is managed via a gatekeeper PCP, or Primary Care Physician, which is part of a closed Network of providers, and where you receive more first dollar benefits and preventative care with a low co-pay vs. a high deductible;
PPO (Preferred Provider Organization) – where you obtain discounted medical services, usually only after a deductible is met, by using doctors within a contracted Network of providers, or, non-Network providers but at reduced benefit levels;
HCSP/HSP (Health Care Service Plan) – where you obtain all services via a preferred Network of Providers with NO out of network benefits. You can self-refer to specialists within that Network, unlike in an HMO. However, you are still required to get basic healthcare via a PCP or Primary Care Physician. (These are newer plan types as of 2014-2015 and onward under the ACA)
EPO (Exclusive Provider Organization) – where you obtain discounted medical services, usually only after a medical is met, by using ONLY those doctors within the “exclusive” network of any given Insurer. Unlike a PPO, there are NO BENEFITS when using doctors, hospitals or medical providers who are outside or not in the EPO.
MSP (Multi State Plan) – a type of PPO Network that provides Network access (equal to your state of residence Network where your health coverage was secured) to doctors throughout all or most of the United States.
POS (Point of Service) – where you decide in which environment you will receive medical care; namely, either in an HMO Network, PPO Network or non-Network (where benefits decrease the further you stray from HMO Network). (These plans are no longer in use post ACA)
HSA (Health Savings Accounts) – where you obtain medical services either through a discounted PPO Network of providers or by any providers of your choice (depending on the type of HSA), and where the Plan itself includes a separate Savings Account coupled with a High Deductible Health Plan (“HDHP” – catastrophic protection coverage). The HSA is a NEWER TYPE of Health Insurance Plan, and is rapidly growing as the plan of choice among consumers. See Here for more complete description of this TWO COMPONENT Plan.
Indemnity (Fee-for-Service) – where you obtain medical services from any licensed providers of your choosing. No longer readily available in the marketplace due to its non-competitive pricing, except in versions such as the newer HSA (see below).
As a general rule you would have to select a non-HMO with a deductible of $500 or more to equal the lower premium costs of an HMO. HMO’s typically require Co-Pays and therefore generally have no deductibles, require no claims paperwork, and have minimal pre-existing condition exclusions for covered benefits.
There are some perceptual positives and negatives with HMOs, depending on one’s personal viewpoint:
The negatives are: you must use only HMO doctors and hospitals, having all of your medical care governed by a “gatekeeper” doctor, or Primary Care Physician (“PCP”), who is part of an IPA, or Independent Physicians Association. It is the PCP and the IPA that actually do the hands on management of all of your medical care; therefore, you have somewhat less freedom of choice over your medical care providers & care.
The positives are: you generally get a premium rate that is less than plans with comparable benefit levels, you have generally better overall benefits than a non-HMO, plus no deductible, no co-insurance for out-patient care, and no claim form responsibilities. HMOs are easier to use and require less hands on involvement by the consumer, due to the management of the care being fully provided by the HMOs contracted PCP/IPA.
A PPO allows one to self refer to, and to receive services either via discounted Network providers, or via any licensed providers of their choosing. However, when using non-Network providers, benefits are reduced, since the discounted services have not been contracted. The built in incentive of these plans is to direct one to services where costs are contractually both discounted and controlled. The further one gets away from the Insurance Company negotiated cost controls within the discounted Network, the lower the benefits, but at least one has the freedom to choose their source of care while still having coverage in either environment.
A HSP requires the use of a Network contracted PCP (Primary Care Physician) for basic medical care; however, unlike an HMO it allows one to self refer to specialists within the Network without having to first obtain approval from the PCP or his/her IPA (Independent Physician Association or Medical Group). Such plans are new as of the 2014-2015 ACA Law and are a bit more user friendly.
An EPO, like a PPO, allows one to self refer to, and to receive services ONLY via “exclusive” discounted Network providers. There are NO BENEFITS when using non-Network providers. Like a PPO, the built in incentive of these plans is to direct one to services where costs are contractually both discounted and controlled.
A great plan type for those who obtain health coverage in their home state of residence but who do a lot of travelling throughout the US. If they visit another state’s PPO Plan Provider doctor or hospital they are covered as though they received treatment in their home state of residence, or “In-Network.” It is critical, however, with this type of coverage that one be certain they have current access (via the Internet as example) of the most current Provider Network…otherwise, if they receive coverage from a Non-Network Provider no coverage will be provided and the costs of said treatment will fall on the insured and not the Insurer.
A very popular “middle ground” type of policy is the “POS” plan design. POS plans are highly flexible plans allowing you to determine your own level of benefits based on where you choose to receive medical care; namely, via an HMO provider, a PPO provider, or from any doctor of your choice. Of course, the further you get away from the Insurance Companies negotiated cost controls within the HMO & PPO (their discounted provider Network), the lower the benefits, but at least you have the freedom to choose your source of care while having coverage in all environments.
HSAs offer special tax benefits while giving you freedom from HMO, managed care, constraints. There can be HSAs with or without PPO Networks. An HSA is comprised of 2 components; namely,
- a qualified High Deductible Health Insurance Plan (“HDHP”), and
- an HSA Savings Account, which is equal to 100% of the High Deductible you select. Money going into the HSA Savings Account is 100% tax deductible, and money coming out of it for “eligible medical expenses” (based upon broader Federal definitions) is Tax Free.
For those who are healthy, and young to middle aged, HSAs can accumulate a lot of cash over the years, which if not used for medical needs, may eventually be used to supplement one’s retirement income. If used in this latter fashion, and taken after Age 64, the 10% penalty tax no longer applies and the HSA income distributions are then taxed at ordinary income tax rates. Some may also plan to use these accumulated dollars to fund Long Term Nursing and/or Home Health Care Insurance needs. Since these are also considered a form of legitimate eligible medical expenses the money would also be received Tax Free.
With HSAs there is the added incentive to protect the tax deferred accumulations within the Savings Account component of the Plan (those monies which are there to meet the expenses of High Deductible requirement).
We have written extensively on HSAs. To learn more about HSAs please review the following linked pages of our website as well as the Treasury’s Field Bulletin:
Other: Field Assistance Bulletin 2004 1
Most Insurers no longer offer this type of plan for the main reason that it is too costly. Indemnity plans are open architecture plans that allow one to go to any licensed provider of their choosing. Historically, Insurers have found that such plans result in service charges where the “sky is the limit”, or “whatever the market bears”; therefore, most carriers no longer offer such plan types.
The best type of Indemnity Plan (again, a plan type that allows you to go to any Doctor of your choosing) is best available through a new type of Medical program called an HSA or Health Savings Account (prior to 1/1/2004 known as an MSA – Medical Savings Accounts (1997-HIPAA created as a trial program that was extended through 2003, and ended with the creation of the HSA). HSA Plans can be either PPO or Indemnity in structure. The basics of an most Indemnity and HSA plan types is that they require one to first meet a High Deductible before any catastrophic benefits are paid out. The thinking of most Insurers is that this will force or compel the consumer to get involved before any costs are incurred, and will also motivate them to negotiate more cost competitive pricing from such providers.
Student Health Insurance
Background Information: On February 11, 2011, the Department of Health and Human Services (HHS) published a Notice of Proposed Rulemaking in the Federal Register relating to student health insurance coverage. The proposed regulation clarifies the circumstances under which health insurance sold to students enrolled in colleges and universities is considered a type of individual health insurance coverage. It also provides that certain Public Health Service (PHS) Act requirements would be inapplicable to such coverage. The policy set forth in the proposed rule would be applicable to policy years beginning on or after January 1, 2012.
Q. What student health plans are affected by the proposed rule?
A. Student health plans that will now be considered “individual health insurance coverage” include those that meet the following criteria:
Plans provided by a college or university through a health insurance company. (This excludes health insurance plans for students that are self-funded by the college or university.)
Plans that are only available to students enrolled in the college or university sponsoring it, as well as their dependents.
Plans that are available to students regardless of their health status.
Q. How is health insurance sold to students considered to be “individual health insurance coverage” different than “short-term limited insurance”? Do PHS Act requirements apply?
A. The proposed regulation clarifies the circumstances under which health insurance sold to students is considered individual health insurance coverage, as opposed to short-term limited duration insurance. Insurance coverage that meets the definition of short-term limited duration insurance is not subject to PHS Act requirements.
With respect to student policies that are individual health insurance coverage, HHS will not consider PHS Act requirements to apply to such coverage for policy years that begin before the first policy year to which the final regulation will be applicable. In addition, issuers that had a reasonable belief that the insurance coverage that they were providing to colleges and universities met the definition of short-term limited duration insurance will not, for purposes of federal law, be considered to be out of compliance pending the start of the first policy year to which the final regulation will be applicable.
Starting with the first policy year to which the final regulation will be applicable, any student health insurance coverage (that is, any insurance sold to students that does not meet the definition of short-term limited duration insurance set forth in 45 C.F.R. §144.103) will be subject to all requirements that will apply to student health insurance coverage under the final regulation.
Worldwide Travel Health Insurance
International travel is becoming more widespread throughout the world. We offer insured health plans for foreign nationals traveling to the US and for US citizens traveling or living abroad. Click Here for plans, rates and online sign up.
Obtaining Health Insurance Approval:
Health Insurance is no longer Medically Underwritten and pre-existing health conditions are no longer a barrier to obtaining coverage; however, obtaining Covered CA Exchange/Marketplace coverage is limited to time periods known as: OE = Open Enrollment or SEP = Special Open Enrollment that occur due to certain Qualifying Events. Please contact us with questions and answers that may address your specific circumstances.
For those of you who are more familiar with names like Anthem Blue Cross or Blue Shield, and prefer these well known brand name Insurers, the above–top of page link–will also quote them, along with most other familiar carriers here in the State of California. If you believe yourself eligible for a Tax Credit then we must seek coverage via the Covered CA Exchange/Marketplace, and quotes for this are not available via the above link. Please call or email us for quotes and assistance.
Additional Needed Information for Quoting Purposes: Under the ACA/Obamacare, much more information is needed to determine eligibility for tax subsidies, that if you are eligible, can lower health plan premiums or show that you are eligible for MediCal (CA). Please call us to discuss and provide us any additionally needed details: 800.482.5347
- Your name and birthdates and those of any dependents to be covered, plus SS numbers on each
- Telephone numbers and email addresses, and best time and place to reach you
- Home address and Zip Code
- Projected Household Income for the year of ACA coverage
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