What you need to know to get the most out of your health insurance

To get the full benefit out of your health insurance plan, you need to understand how your plan works, what it pays, what you’re responsible for paying, and what services, doctors and hospitals are included in your plan. This primer on health insurance basics will help you get the information you need to get the most out of your plan.

What type of plan do you have?

There are five common types of health insurance plans:

• The preferred provider organization (PPO) includes a network of doctors, hospitals, diagnostic testing facilities, pharmacies and other medical service providers that have agreed to provide care to members for a reduced fee. You can use healthcare providers and facilities outside the PPO network, but you will need to pay more for your care.
• If you have a health maintenance organization (HMO), you need to receive your care from physicians and medical facilities that work for or contract with the HMO. The plan does not pay for care received from medical providers outside the HMO network.
• In a point of service plan (POS), you pay less for your care when you use doctors and medical facilities that are in the plan’s network and you usually need a referral from your primary care physician to see a specialist. You can use healthcare providers outside the network, but you will pay for a larger percentage of the cost of your care.
• If you have a fee-for-service plan, you can use any medical provider you want. If the provider accepts your insurance, he or she will usually file a claim for you. If not, you’ll need to pay the provider and file a claim to be reimbursed by the insurance company.
• A high-deductible health plan (HDHP) requires that you pay a significant amount of money, often thousands of dollars, out of your own pocket before the plan pays for your care. If your HDHP is an employer-based plan, it can be linked with a health savings account (HSA). You can deposit money into this account from your paycheck before taxes and use the money to pay for qualified healthcare costs.

Health insurance terms you need to know

Here are some of the key terms you need to understand to get the most out of your health insurance:

• Deductible: The amount you pay out of pocket before your plan starts paying for covered medical expenses.
• Coinsurance: The percentage of the cost of covered medical expenses you pay, for example, some plans pay 80 percent of covered expenses after you meet your deductible and you pay 20 percent of those costs.
• Copayment: The set amount you pay at the time of service when you receive care, for example in some plans you pay $50 every time you see a specialist.
• Out-of-pocket maximum: This is the most you have to pay for covered medical services during a single plan year. Once you reach this maximum, your plan pays 100 percent of covered medical expenses for the remainder of the plan year.
  

How much will you pay?

The cost of your health insurance goes beyond the monthly premium for your plan. You will also pay the full cost of care until you reach your deductible, coinsurance for your care and any copayments required by your plan, as well as the cost of care not covered by your plan.

To keep your costs down, it’s important to know what services are covered by your plan, whether you need a referral or preauthorization for care, and what doctors, healthcare providers and facilities are included in your plan’s network. It can also be helpful to compare what different healthcare providers charge for the same service, especially if you are responsible for paying a percentage of the cost of your care.

By learning the details of your health plan, you’ll be able to get the most out of the coverage you choose.