Helping You Understand Health Insurance
Health insurance provides essential coverage for cancer patients, by paying for large amounts of care costs, which can add up quickly. Educating yourself about the various health plans available is an important part of choosing the right coverage for your needs. Learn about several common health plans below and talk with your employer or an independent insurance consultant about the specific benefit options available to you.
Traditional Health Plans
There are two types of comprehensive health insurance, which cover hospital stays, medical tests and procedures, prescription drugs and other healthcare services that vary from plan to plan. Traditional health plans, also known as fee-for-service health insurance, generally allow you to visit any healthcare provider and any hospital. You pay a deductible before coverage begins and a percentage of your medical costs thereafter, which can be more costly than managed care plans.
Managed Care Health Plans: HMOs and PPOs
Managed care plans work with networks of providers and hospitals that have agreed to accept a specific fee for their services. There are two primary types of managed care health plans: preferred provider organizations (PPO) and health maintenance organizations (HMOs).
With an HMO, you must choose a primary care physician that is in the plan's network and a referral from your primary care physician is required to see a specialist, who also must be in-network. Similar to choosing a provider, an HMO restricts which hospitals you may be treated at, except in the case of emergency care.
A PPO provides the option of visiting physicians and hospitals at your discretion, with at least part (or most) of your fees covered, depending on whether you are in-network or out-of-network. You pay 100% of costs until your deductible is met. You’ll receive a higher level of benefits and pay less if you choose an in-network provider. Once you reach the out-of-pocket maximum, the plan pays 100% for the rest of the calendar year. There is no referral required to see a specialist, which gives you more autonomy to make choices about the type of cancer care you receive.
While a PPO offers more choices, out-of-pocket expenses can add up. The benefit of an HMO is that there is no deductible to meet before services are covered. You have a better sense of your medical costs, but lose some flexibility in favor of those savings. An HMO typically does not cover medical care received from out-of-network providers and hospitals.
Other Common Terms
A fixed percentage that a patient is responsible for paying for covered medical services, in addition to the deductible. For instance, some plans pay 80% of covered services after the deductible, which means the patient pays 20%. Co-insurance is common in Traditional Care Plans, and in some PPO Managed Care Plans.
A fixed dollar amount that that a patient is responsible for paying for covered medical services, in addition to the deductible. For instance, a routine physical exam may cost $20. The remainder is paid for by the health insurance provider. Co-payments are common in PPO Managed Care Plans, and in some HMO Managed Care Plans.
The amount a patient is responsible for paying each calendar year before the insurance provider pays for covered medical services. As a rule, higher deductibles usually mean lower premiums and lower deductibles equate with higher premiums. Deductibles may not apply to all services, depending on the terms of the plan.
The maximum amount an insurance company will pay while you have coverage with that plan. The typical amount is between $1 million and $5 million. Some plans have no lifetime maximum. Once the limit is reached, medical coverage is no longer provided. Supplemental health insurance plans can help pay for expenses that exceed the lifetime maximum.
The dollar amount a patient pays for health insurance coverage, usually monthly or bi-weekly. In general, premiums are highest with Traditional Care Plans and PPO Managed Care Plans, and lowest with HMO Managed Care Plans.