Understand What Your Health Insurance Covers

Health insurance helps protect you from high medical care costs, however, your covered services is the agreement between you and your insurance company. The policy will lists the medical benefits such as tests, drugs and treatment services. The insurance company agrees to cover the cost of certain benefits listed in your policy. Depending on your health plan, you may not be covered for certain types of health conditions. Most health plans only pay for what they define as medically necessary. Before having an elective procedure, make sure that you understand your plan’s benefits.

Health insurance is important for you and other members of your family. Insurance helps to protect you from high health care costs, especially those related to chronic medical conditions. The main thing is to choose the right family health insurance plan. You should make up your mind and determine how much you are willing to spend on the insurance. A short-term insurance plan is  inexpensive though it covers a short period of time, as compared to a long term family health insurance plan.

However a medical necessity is not the same as a medical benefit.  A medical necessity is something that your doctor has decided is necessary. A medical benefit is something that your insurance plan has agreed to cover. In some cases, your doctor might decide that you need medical care that is not covered by your insurance policy.

Insurance companies determine what tests, drugs and services they will cover. These choices are based on their understanding of the kinds of medical care that most patients need. Your insurance company’s choices may mean that the test, drug or service you need isn’t covered by your policy.

You should understand your insurance cover, if you understand it, it help your doctor recommend medical care that is covered in your plan.

So take the time to read your insurance policy. It’s better to know what your insurance company will pay for before you receive a service, get tested or fill a prescription. Some kinds of care may have to be approved by your insurance company before your doctor can provide them.

If you still have questions about your coverage, call your insurance company and ask a representative to explain it.

Remember that your insurance company, not your doctor, makes decisions about what will be paid for and what will not.

Types of Health Plans

Health insurance plans can vary in their design. While many plans have combinations and hybrids that can blur the distinction, the most commonly encountered types of plans in use today are:

  • Preferred Provider Organizations (PPO) – These plans will generally provide some coverage for any licensed physician or provider that you use, however, the benefits are designed to pay more if you use a Network Provider, a doctor or hospital that the plan has contracted with. In addition to providing broader coverage for these Network Providers, you also cannot be overcharged because the contract between the plan and the provider limits what the doctor can charge both you and the plan.
  • Health Maintenance Organizations (HMO) – HMOs typically require you to go to one of their Network Providers in order to receive coverage. If you go outside their network the plan will not pay anything, unless it is a life-threatening emergency. HMOs further limit your choice by insisting that all your care come through a Primary Care Physician, who decides when and if you should see one of their contracting specialists.
  • Point-of-Service Plans (POS) – This is really just a combination of the other two, an HMO and PPO. Benefits are determined by which provider you use. If you see a provider that is in their “HMO” network, benefits are paid the broadest, with less going to one of their “PPO” providers and even less benefits for going out of their network entirely.

NOTE Health insurance can be very confusing. There are many different health plan options and each state has different rules and regulations. Understanding your insurance will help you avoid unexpected costs and hassles.