About Insurance

What is medical insurance?

Health insurance is a type of insurance coverage that will cover the cost of an insured individual’s medical and/or surgical expenses. Depending on the type of health insurance coverage, either the insured pays costs out-of-pocket and is then reimbursed, or the insurer makes payments directly to the provider.

In health insurance terminology, the “provider” is a clinic, hospital, doctor laboratory, health care practitioner or pharmacy. The “insured” is the owner of the health insurance policy and coverage.

Why do you need health insurance?

Health insurance, also known as medical or healthcare insurance, covers a portion of the cost of medical expenses. How much insurance covers, and how much does the patient pay out of pocket, such as co-pays, deductible and/or coinsurance depends on the policy details itself, as well as its rules and regulations that apply to the specific plans.

If you end up needing medical care and don’t have a health insurance plan you may be left with large medical bills and you may even encounter some providers who will not accept you as their patient.

It’s important to understand that you cannot just purchase healthcare insurance when medical needs arise. There are usually open enrollment periods that apply, whether it’s enrolling through an employer or buying your own coverage through the Marketplace. There are some circumstances that you may enroll after these dates such as marriage, divorce, loss of coverage due to changing jobs, for example, these are considered special occasion enrollment periods.


Private and Public Healthcare Coverage

Public Healthcare Coverage: Governed by the federal government (Medicare); Governed by both federal and state governments (Medicaid and CHIP, Indian Health Services and VA coverage)

Private Healthcare Coverage: May be provided through an employer, such as a group plan insurance or purchased by the individual or family through the Marketplace.

Both of these plans use a sort of managed care plan (PPO, POS, HMO or EPO) which a private insurer will manage and oversee services, quality of provided care, reimbursement system, provider network and rules such as prior authorization when needed.

PPO plan: Preferred Provider Organization, is a type of managed care health insurance plan that has an arrangement with an insurance company in which a network of medical professionals and facilities provide services at a reduced rate.  PPO plans offer more flexibility to receive care from any provider that is in or out-of-network, patients can pick any provider and use any hospital.

POS plan: Point-of-Service Plan, is a type of managed care health insurance plan that provides different benefits for using in-network or out-of-network providers. This is a hybrid of a PPO and HMO plans. Like an HMO, participants designate an in-network provider to be their primary care provider but may choose to go to out-of-network providers as well. If a patient stays within the network, this plan usually has less out of pocket expenses than if they go out-of-network.

HMO plan: Health Maintenance Organization, is a type of managed care health insurance plan that requires the patient to choose an in-network primary care physician (PCP) in which the PCP manages the patient’s  medical care by taking care of most of their needs. Before seeing a specialist, the patient will need to obtain a referral from their PCP. This plan usually has a lower out-of-pocket expense compared to PPO or POS.

EPO plan: Exclusive Provider Organization, is a type of managed care health insurance plan that only covers providers within your specific network. It requires the patient to get their healthcare services from in-network providers and hospitals only, usually there is no out-of-network services. Typically, a low out-of-pocket expense for the patient.

No one type of health care plan is better than the other.

The right plan for you depends on your particular needs and preferences.