Getting to Know the “Lingo”

When you shop for a new health insurance plan, you may feel a bit challenged by health insurance terminology. In order to shop smart, learn the differences between the top four kinds of individual and family plans available:

PPO

A PPO is an acronym for “Preferred Provider Organization.” These are the most popular in the Family and Individual Market. With a PPO, you will need to obtain your medical care from physicians and hospitals on the list of providers the company provides in order to have your claims paid at the highest level. Services you render out of network may not be covered or could be paid at a lower level, leaving you responsible for more than just your co-payment.

HMO

HMO is an acronym for “Health Maintenance Organization.” An HMO will offer a wide range of services through network providers that have contracted exclusively with the HMO. As a member of an HMO, you will have to choose a primary care physician – known as your “PCP” – who will provide the bulk of your health care and refer you to HMO specialists if need be. If you seek healthcare outside of the HMO, they will not likely be covered, though there may be exceptions in the case of an emergency.

HSA

PPO plans with higher deductibles may be designed to work with the use of a “Health Savings Account” or HSA. An HSA is a special account that allows you to save money, pre-tax, to be used specifically for future medical expenses. Money in an HSA rolls over every year and can gain interest.

INDEMNITY

An indemnity plan allows you to visit the doctor or hospital of your choice, allowing you to direct your own healthcare. With this type of plan, the insurance company will pay a set portion of your total medical expenses. Paying for some services upfront may be required, for which you would then apply for reimbursement of some of the funds. These, by nature, tend to be more expensive than the other types of health insurance plans because you can select your medical care.