Choosing the right health plan for your family is a major decision, so it’s important to understand all of your options.
The following plans are available:
Indemnity Plans
Also known as fee-for-service plans, indemnity plans allow you to choose any hospital or doctor you want. You pay an annual deductible and a percentage of your medical bill. These are usually the most expensive plans.
Health Maintenance Organization (HMO)
HMO plans require you to select a primary care physician (PCP) who manages and coordinates all medical care. PCPs are usually pediatricians, family physicians, internal medicine physicians, or gynecologists. Patients need a referral from the PCP before they see a specialist or other doctor within the HMOs network.
Preferred Provider Organization (PPO)
With a PPO plan, you are not required to select a primary care physician (PCP) and you do not need a referral to see other providers in the plans network. For some PPOs, if you receive care from a provider within the network, you are only responsible for your annual deductible and a copayment. If you choose to receive services from a provider not in the preferred network (known as going “out-of-network), you will pay a higher amount.
Point of Service (POS)
A Point of Service (POS) plan is like a combination of a health maintenance organization (HMO) and a preferred provider organization (PPO). Generally, you choose a primary care physician (PCP) who manages and coordinates all medical care. You may choose to go to a provider out of your plans network, but you will be responsible for most of the cost, unless you are referred by your PCP. These plans are known as point-of-service, because at each point that you require a health care service, you can decide to allow your PCP to coordinate your care, or go outside your network without a referral from your PCP.
Exclusive Provider Organization (EPO)
With an Exclusive Provider Organization (EPO) plan, services are covered only if you receive care from providers, specialists, or hospitals within the plan’s network.
Other Plans (Government-Funded)
Medi-Cal
Medi-Cal is a public health insurance program serving low-income families, children, seniors, persons with disabilities, children in foster care, pregnant woman, and certain low-income adults. Medi-Cal is financed by the State and Federal government. For more information about the program, please visit the Medi-Cal website (www.medi-cal.ca.gov).
California Children’s Services (CCS)
California Children’s Services (CCS) is a state program that provides diagnostic and treatment services, medical case management, and physical and occupational therapy services to children under age 21 with CCS-eligible medical conditions. For more information about the program, please visit the CCS website (www.dhcs.ca.gov/services/ccs/Pages/default.aspx).
Terminology
Co-Insurance
A percentage amount that is the insured’s responsibility after the deductible has been paid. For example, an 80/20 co-insurance plan with a $300 deductible would mean the insured is to pay 20 percent of the covered costs after the $300 deductible has been paid, while the insurance company will be responsible for the remaining 80 percent.
Co-Payment
The co-payment is a fixed amount that the insured is required to pay to receive a medical service or to receive medication. For example, the insured may have a $40 co-payment for a doctor’s visit, or to obtain a prescription. A co-payment must be paid each time a particular service is obtained.
Deductible
The amount that the insured must pay before an insurer will pay any expenses. For example, the insured might have to pay a $500 deductible per year, before any of their health care is covered by the insurance company. Usually, deductible amounts are reset for each year of the policy, meaning you will have to meet a new deductible every year.
Exclusions
The exclusions are the expenses that the insurance policy will not cover. Generally, the insured is responsible for the full cost of non-covered expenses.
Explanation of Benefits (EOB)
A document that may be sent by an insurance company to the insured explaining what medical treatments and/or services were paid for on their behalf. This is commonly referred to as an EOB form.
Grace Period
The amount of time the insured has to pay their health insurance premium after the original due date before insurance coverage would be canceled.
Lifetime Maximum
The most amount of benefits the health insurance policy will cover during the insured’s lifetime.
Out-of-Pocket
The cost one would pay out of their own pocket beyond the monthly plan premium. Depending on your health plan, out-of pocket expenses may include an annual deductible, co-insurance, and co-payments for doctor visits and prescription drugs.
Waiting Period
A designated period of time that must pass until some or all health benefits are available to the insured.