California Health Insurance Explained
Individual Health Insurance
Individual health insurance is a type of policy that you can purchase for yourself, which is great if you are single or do not need other family members covered on the policy. Just like any other insurance policy, there are many different types including PPO, HMO and even short-term health insurance, which are covered later.
Family Health Insurance
Family Health Insurance is exactly like an individual policy, however, family health insurance is a policy that can cover multiple people within a family. There is one main policyholder but each member of the family is listed under the primary policy holder.
Definitions:
- PPO – Stands for Preferred provider Organization and will normally require the individuals to visit doctors within a certain network in order to receive proper insurance coverage. This type of plan usually has a deductible that varies upon plan as well as a standard flat rate co-payment for each doctor visit.
- HMO – Health Maintenance Organizations are usually more affordable than PPOs, but there are generally more restrictions as far as doctors that can be seen. An HMO requires the selection of a Primary Care Physician, a doctor which will usually be the main physician seen for all general visits. HMO plans do not usually have a deductible and the co-payment is normally lower than that of a PPO.
- Indemnity Plan – Allows for greater freedom in health care choices, generally lacking a certain type of network that you must abide with. In exchange for the freedom to choose any physician, indemnity plans require a deductible and might involve paying for your visit then issuing a claim for reimbursement from the insurance company. The rate, a UCR (usual, customary and reasonable), will be paid out on your claim and is predetermined by your health insurance company before purchasing your policy.
- HSA Plan – A Health Savings Account, also referred to as a Flex Spending Account (FSA), is a type of plan that allows the holder to put away money, pre-tax, to be used for medical expenses. Established in January of 2004, the HSA policyholder can contribute to the savings account throughout the year and may use the funds for anything from co-payments to prescriptions, even paying down the deductible. Unused funds in your account may accrue interest year-to-year if your plan allows you to carry a balance.
- Co-Payment – Co-payments are charges that are agreed upon between you and your insurance company before you purchase your plan. Co-pay amounts can range anywhere from $15-$50, but are usually around $20 per visit. Co-payments, depending on your policy, may be required for doctor’s visits or for prescriptions.
- Deductible – A deductible is a set dollar amount, which is set by the insurance company. This dollar amount must be met before the insurance company can assume responsibility for further payments. If you have a family health insurance plan, each member of the household will have their own deductible. Once you have met the deductible, your insurance will cover any further costs accrued for that year.
- Co-Insurance – Your co-insurance is completely separate from your co-pay and deductible. Ranging anywhere from 10% to 80%, your co-insurance is an amount of the total you may be required to provide. For example, if a procedure costs $500 and you have a 10% co-insurance, you will be required to pay $50 for that procedure and the insurance will cover the rest of the cost.
- In-Network Provider – This is any doctor or health care practitioner that is contracted with your insurance company and as such, is covered under your health insurance policy. When you purchase your policy, you will receive a list of in-network providers.
- Out-of-Network Provider – Any additional provider that is not contracted with your insurance company is referred to as out-of-network. Using one of these providers will cost more, depending on your plan, and may not be covered at all.
Finding the Best Health Insurance Plan
California Health Insurance plans have a wide variety of ranges as you can see from the above FAQ. In order to decide which health insurance plan is best for you, take note of your financial and medical requirements. Your health is important so don’t be afraid to ask questions and get quotes from different companies.