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What Are Health Insurance Plans?
Health insurance plans are insurance policies designed to help consumers pay for health care. Health insurance plans are often necessary because the out of pocket expense of medical emergencies are often too expensive for a single person or family to pay all at once. Overtime, health insurance has evolved to cover health benefits other than medical emergencies, such as vision, dental, and other medical needs.
The overall concept is still the same though: the consumer, among other customers, pays the insurance company premiums in exchange for the insurance company footing the total cost of the medical bill if the policy holder ever needs assistance in paying medical bills.
However, the cost of health care insurance has increased significantly overtime. In 2010, the federal government passed the Affordable Care Act, or Obamacare, in an effort to control the rising price of healthcare.
Types of Health Insurance Plans
There are a number of different health insurance plans available to you. Usually your employer will have a group health insurance plan that you can participate in. You can also buy health insurance on your own.
Here are the three most common types of health insurance plans available:
- Fee-for-Service - If you have fee-for-service health insurance then you must pay a monthly fee called a "premium." As you see doctors over the course of a year you will be responsible to pay a specific amount called a "deductible." Usually the deductible is around $250-$1000 per year, but it can be more or less. Once you have paid the deductible, your insurance company will start paying a percentage of your medical bills; you will pay the remaining percentage. For example, your insurance company might pay 75% of your medical bills, meaning you would pay 25%.
- The major benefit of having a fee-for-service plan is that you can choose to see any doctor you want to and change doctors whenever you wish.
- Health Maintenance Organizations (HMOs) - HMO companies take care of all your medical needs including doctor's visits, prescription drugs, and hospital stays. When you sign up for an HMO plan you pay a monthly fee. Then, when you need to see a doctor or have to go the hospital you only pay a small co-payment, usually around $5 to $25. There is no deductible for an HMO plan.
- Unfortunately, HMO's usually do not let you choose your own doctor. You are either assigned to a primary doctor or given a limited choice of doctors. You cannot see a specialist or another doctor without a referral from your primary doctor.
- Preferred Provider Organizations (PPO) - Preferred Provider Organizations (PPOs) are like HMOs in that you pay a monthly fee, which entitles you to see a limited number of doctors for a small co-payment. A PPO, however, does not completely deny coverage when you see a doctor who is not a member of the PPO.
- When you see a doctor outside of the PPO, your insurance will pay a percentage of the bill. You will have to pay for the remaining part of the bill.
What Are Obamacare Metal Health Insurance Plans?
Obamacare created a series of healthcare insurance exchange markets where consumers can buy insurance. These exchange markets offer different types of plans, based on how much a consumer is willing to pay out-pocket expenses and premiums. The point of the plans is to provide different levels of medical coverage. Although each plan can offer different levels of benefits, all of them are required to provide at least these ten benefits (scroll down to the section "Essential Health Provisions.)
Under Obamacare, there are four different types of plans, each of them named after a certain metal:
- Platinum: 90% medical coverage by insurance company
- Gold: 80% medical coverage by insurance company
- Silver: 70% medical coverage by insurance company
- Bronze: 60% medical coverage by insurance company
It is generally assumed that the consumer will pay the remaining percent in out-of-pocket coverage to the healthcare provider directly. For instance, in a platinum plan, the consumer only has to pay 10% in out-of-pocket expenses while a bronze plan would have to pay 40% in out-of-pocket expenses. The insurance company would cover the rest of the bill according to the plan’s percentage above.
However, this is not the complete picture. Although a platinum plan holder only has to pay 10% in out of pocket expenses, their premiums could be more expensive than the other four plans.
Suppose that a patient has a medical bill of $5,000. A patient with a platinum plan would only have to pay $500 out of pocket, but might have to pay $3500 annually in premiums. A bronze policy holder might have to pay $2000 out of pocket, but only $1200 in annual premiums. Assuming the bronze plan holder doesn’t need medical assistance, the bronze plan holder could actually be spending less than the other plans. The true values of the plans will be based upon medical needs.
How Much Do I Have To Pay In Out-of-Pocket Expenses?
The final factor to consider is that Obamacare limits the amount of out-of-pocket expenses a person has to pay. Regardless of whether the plan is platinum or bronze, individuals cannot pay more than $6,250 in out-of-pocket costs and families cannot pay more than $12,500 in out-of-pocket costs annually.
My Health Insurance Company Denied Payment for Medical Treatment. What Should I Do?
The first thing you should do is review your health insurance policy. The policy will tell you whether or not your health insurance company was supposed to pay for the medical treatment you received.
If you think you were entitled to coverage and your insurance company denied it, you should file a complaint with your health insurance company. Most insurance companies have a complaint process that you can go through to try and get payment for your medical treatment. If this fails, and you still believe you deserve payment, you may want to file a lawsuit against your health insurance company for bad faith.
Do I Need an Attorney to Help Me with My Health Insurance Problem?
Interpreting your health plan policy can be tricky. An attorney can help you understand your policy and let you know exactly what kind of benefits you are entitled to. If you have a problem with your health insurance company and want to sue them, an attorney will know the process of taking on a big health insurance company.
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Last Modified: 01-15-2014 11:49 AM PST
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