- Covering the costs of cancer treatment
- Private health insurance options
- Types of private health plans, and what you must pay
- Other things to know about health insurance
- Getting answers to insurance-related questions
- Keeping records of insurance and medical care costs
- When you have problems paying a medical bill
- Handling a health insurance claim denial
- Keeping employer-sponsored health insurance coverage
- COBRA (Consolidated Omnibus Budget and Reconciliation Act of 1986)
- The Health Insurance Portability and Accountability Act of 1996 (HIPAA)
- The Family and Medical Leave Act of 1993
- The Americans With Disabilities Act of 1990
- Government-funded health plans
- Who regulates insurance plans?
- Health insurance options for the uninsured
- Financial issues: Getting help with living expenses
- Getting money from life insurance policies
- Other sources of financial help
- Disability benefits
- To learn more
Types of private health plans, and what you must pay
There are many types of health insurance and health service plans. Most of them require that you pay a monthly fee, called a premium. Most of them also require that you pay either a flat fee for doctor’s office visits and other services (called a co-pay), or a percentage of the cost (called co-insurance). Each year, you likely will also have to pay a certain dollar amount of your medical costs, known as the deductible, before your insurance will start to pay. After you have met your deductible, your insurance will pay a set percentage of your bills for medical care for the rest of the year.
Co-payments or co-pays are the amount you must pay at the time of service, usually a flat fee for office visits or other services. Sometimes co-pays are confused with co-insurance, but they’re not the same.
Co-insurance is a percentage of the bill you must pay even after you’ve paid the yearly deductible amount.
The deductible is the amount that you must pay each year for health services before the insurance plan will pay anything.
You may have to pay your medical bills yourself and then fill out forms and send them to your insurer to get paid back. If your doctor “accepts” your insurance, their office will often bill the insurance company for you, and then send you a bill for the amount your insurance didn’t cover. Keep track of your own medical expenses and payments that are made by you and your insurance company. This can help you greatly if there’s a dispute about payments or other problems in the future.
Here are very brief descriptions of private plans that used are most often:
Managed care plans
These types of plans typically coordinate or “manage” the health care of enrollees. There are different types of managed health care plans. Some plans – like health maintenance organizations or HMOs – have a more limited network of providers and hospitals while other models like Preferred Provider Organizations (PPOs) have a wider provider network.
Most managed care plans have lower premiums, co-pays, and/or co-insurance than traditional fee-for-service insurance. Premiums, co-pays, and co-insurance amounts can differ between managed care companies and even between services within the same company. There’s usually no need to file claim forms.
Some managed care plans require members to use a primary care provider who coordinates all of the patient’s care and serves as a “gatekeeper” for care from specialists. The gatekeeper is usually a primary care doctor who’s responsible for the overall medical care of the patient. This doctor organizes and approves medical treatments, tests, specialty referrals, and hospitalizations. For example, if you need to see an expert like a lung specialist, you would need a referral from your primary care doctor before the specialist sees you. Otherwise your plan might not pay.
Under most plans, members must use only the services of certain providers and institutions that have contracts with the plan. These plans may require that members choose providers from a particular list or network of providers. When you choose to go outside the network for care, you generally have to pay more, or even pay for the full service with no help from your health insurance plan. Some of these plans will pay at least part of the cost to see someone outside the network if you get approval from the plan before the visit or service (also called pre-authorization).
Many different types of institutions and agencies sponsor managed care plans, not just insurance companies. These include employers, hospitals, labor unions, consumer groups, the government, and others. It helps to know all the ins and outs of the plan and how it will affect your care.
These are the most common types of managed care plans:
- Health maintenance organizations (HMOs): The HMO will usually cover most expenses after a modest co-pay. HMOs often limit your choice of providers to those within their approved provider network. This means you have to check their listing to be sure the doctor you want to see is one of their doctors. If not, the bill may not be covered in full or at all. You might have to change to a different type of health plan to have your doctor’s services paid. Or, you may have to switch to one of the approved doctors on their list.
- Point-of-service plans: A point-of-service plan (POS) is a type of HMO. The primary care doctors in a POS plan usually refer you to other doctors in the plan or network. If your doctor refers you to a doctor who’s not in the plan (out of network), you should check to see if the plan will pay all or part of the bill before you go. But if you choose a doctor outside the network, you will have to pay co-insurance, even if the service is covered by the plan. Co-insurance is what you must pay in addition to what the insurance company pays for each service. It’s usually a certain percentage of the cost. For example, the insurance company may pay 80% of the bill and you have to pay the other 20%.
- Preferred provider organization: The preferred provider organization (PPO) is a hybrid of fee-for-service (below) and an HMO. Like an HMO, there are only a certain number of doctors and hospitals you can use to get the most coverage. When you use those doctors (sometimes called preferred or network providers), most of your medical bills are covered. When you don’t use these providers, the PPO makes you pay more of the bill out of your own pocket. So you pay more to choose providers that are not in the network.
Getting the most from your managed care plan: Sometimes you must go out of network for care. You may be able to reduce your costs if you discuss and negotiate costs up front with doctors, clinics, and hospitals when surgery, procedures, or other treatments are planned. You may want to contact your insurer to find out what the company will pay and how much you’ll have to pay, or if you can get prior authorization from them to get out-of-network care. You can use this information to find out if the medical facility or clinic will be willing to accept the amount paid by insurance as full payment. If not, ask if they’re willing to discount the portion you’re asked to pay.
Fee-for-service plans are the least restrictive plans that offer the most choice in medical providers. They are also called traditional health plans. If you have this type of health insurance, you can choose any doctor who accepts your particular health insurance plan, change doctors any time, and go to any hospital anywhere in the United States.
Things to consider when shopping for health insurance
For people living with cancer it’s especially important to choose a health insurance plan that best meets your needs. When comparing plans, consider a number of factors, including:
- What are the total benefits covered by the plan?
- What are all of the costs associated with the plan, including premiums, deductibles, co-pays, and co-insurance?
- Are your providers included in the network of doctors and hospitals covered by the plan?
- Does the plan cover the prescription drugs you take? For some ideas on looking at this, see the American Cancer Society Cancer Action Network (ACS CAN) document Tips for Choosing a Health Insurance Plan with the Best Prescription Drug Coverage for You.
For more on selecting an insurance plan, see “Shopping for insurance coverage” in the section “Health insurance options for the uninsured.”
Last Medical Review: 02/16/2015
Last Revised: 02/16/2015