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1. Why do you need health insurance?

The purpose of health insurance is to help you pay for care. It protects you and your family financially in the event of an unexpected serious illness or injury that could be very expensive. In addition, you are more likely to get routine and preventive care if you have health insurance.

2. What is the difference between an HMO and a PPO?

The most common health insurance models are the HMO and the PPO; the differences between them are the size of the network, the ability to see specialists, plan costs, and coverage for out-of-network services. In both types of plans, certain doctors and facilities agree to participate in networks of coverage; they agree to provide care at lower than usual costs. An HMO will have fewer network providers and more limitations on coverage than a PPO.

3. What is an HMO?

HMO stands for Health Maintenance Organization. A Health Maintenance Organization (HMO) offers limited coverage. You will have coverage for a medical emergency, and you will have one doctor who acts as a gatekeeper and is responsible for managing your overall care. This gatekeeper will determine whether you need specialized care, and with his/her referral you will be able to see other providers. Usually, you will have an opportunity to change your PCP during the plan year. Typically, you will pay all costs for any care you obtain outside of your plan's network. So it's important to carefully consider which doctors and hospitals are in a plan's network before you buy it.

4. What is a PCP?

PCP stands for Primary Care Physician. If you choose to have an HMO, you must select a physician from your network to handle your primary care; this doctor will refer you to other doctors and facilities if you need specialized care. The doctor is under contract with the organization and is paid a fixed monthly fee by the insurance company to manage your care, regardless of the types or levels of services you require.

5. What is a PPO?

PPO stands for Preferred Provider Organization. A Preferred Provider Organization (PPO) is a type of health insurance arrangement which allows plan participants relative freedom to choose the doctors and facilities they want to visit. As a member of a PPO, you will have a broad network of providers and may self-refer to specialists (no referral from your PCP is needed); also, if you choose to obtain care from a doctor or facility who is not preferred you will still have coverage however, you will share more of the costs.

6. What is the difference between "In-Network" and "Out-of-Network"?

A network includes all the health care providers who work with your insurance company to care for health plan members like you. Your insurance company has agreed to pay those health care providers a certain amount of money for your visits usually a discounted rate. Because of those discounts, you pay less when you see a health care provider in the network versus one who s outside the network. But if you go out of your network for health care, it can become a lot more expensive. For Example:

In-Network : You go to a doctor and the total charge is $250. You get a discount of $75 because you went to an in-network doctor and the negotiated rate with them is lower than the amount billed. So the insurance company pays $140, and you pay what's left, which is $35.

Out-of-Network : You go to a doctor and the total charge is $250. You won't get a discount because the doctor is out-of-network. The insurance company still pays $140, but you'll be responsible for what's left, which is $110. We call this balance billing.

7. How do deductibles, coinsurance, and copays work?

When both you and your health insurance company pay part of your medical expense, it s called cost sharing. Deductibles, coinsurance and copays are all examples. Understanding how they work will help you know when and how much you have to pay for care.

Deductible: A deductible is the amount you pay for health care services before your health insurance begins to pay. Let's say your plan's deductible is $1,500. That means for most services, you'll pay 100 percent of your medical and pharmacy bills until the amount you pay reaches $1,500. After that, you share the cost with your plan by paying coinsurance and copays.

Coinsurance: Coinsurance is your share of the costs of a health care service. It's usually figured as a percentage of the amount we allow to be charged for services. You start paying coinsurance after you've paid your plan's deductible. For example, Lisa has allergies, so she sees a doctor regularly. She just paid her $1,500 deductible. Now her plan will cover 70 percent of the cost of her allergy shots. Lisa pays the other 30 percent; that's her coinsurance. If her treatment costs $150, her plan will pay $105 and she'll pay $45.

Copay: A copay is a fixed amount you pay for a health care service, usually when you receive the service. The amount can vary by the type of service. You may also have a copay when you get a prescription filled. For example, a doctor s office visit might have a copay of $30. The copay for an emergency room visit will usually cost more, such as $250. For some services, you may have both a copay and coinsurance.

8. What does all this mean ?

When choosing a plan, think about how much you use your insurance and how much protection you want against unpredictable expenses. Then look at the plan's deductible, coinsurance and copays and find what works best for you. Typically, the lower a plan's monthly payments, the higher the deductible will be and the more you will pay in coinsurance. If you visit your doctor or pharmacy often, you might want to choose a plan that has a low copay for office visits and prescriptions.