A BASIC GUIDE TO UNDERSTANDING HEALTH/DENTAL/VISION INSURANCE PLANS

Are you having difficulty choosing an insurance plan? Here are some basics about health, dental and vision insurance. The main types are, in order from lowest premiums/least coverage to highest premiums/most coverage are an HMO or DHMO (Health Maintenance Organization or Dental Health Maintenance Organization) plan, EPO (Exclusive Provider Organization) plan, a PPO (Preferred Provider Organization) plan and an indemnity plan. The higher the premium, the higher the coverage. In other words, the more you pay, the more you get.

An HMO or DHMO (Health Maintenance Organization or Dental Health Maintenance Organization) plan requires you to choose a contracted (in-network) general practitioner or provider, also called a primary care practitioner or primary care provider(PCP). You must have a referral from the PCP before seeing a specialist, who must also be contracted. This plan will not pay for procedures performed by an out- of-network (non-contracted) provider.

An EPO (Exclusive Provider Organization) plan is generally associated with Medicaid or Medicare. It is similar to an HMO or DHMO except that you can see a specialist without a referral. Again, the specialist must be in-network. Typically, providers must obtain pre-treatment authorization before the plan will cover certain procedures.

A PPO (Preferred Provider Organization)plan covers treatments by contracted and non-contracted providers. However, the benefits for in- and out-of-network treatments may differ. In some PPO plans the co-insurance (your and the insurer's percentage share of a charge) and the annual maximum (yearly benefit cap) are less and the deductibles are higher for out-of-network treatments. Some PPO plans waive deductibles for in-network treatments. Non-contracted providers who take the plan submit a claim for their usual and customary charges (UCR's) for procedures they perform and bill you for any balance left after the insurance payment. This is called "balance billing." Non-contracted providers will charge you upfront for procedures they perform and then you must submit the claim to the insurer for reimbursement.

An indemnity plan is similar to a PPO plan except it has no contracts and may provide world-wide coverage. The providers bill the UCR's and may either submit claims for procedures performed or charge you upfront depending on whether they take the plan. People who have this plan typically are those who travel frequently. International companies such as the Coca-Cola Company and Caterpillar will typically offer their employees indemnity plans. However, many individual plans are indemnity plans.

Here are some common mistakes insurance policyholders make:

Not reading and understanding their plan booklets. You should read all literature regarding your plan. If you receive a new plan booklet review it for changes to your plan. You should know at least as much about your plan as the provider does. If any written information is unclear call the insurer or visit its website for clarification.

Not verifying coverage before treatment. Contact the insurer or visit its website and verify what the plan's maximum benefit is, how much of it remains, whether particular procedures are covered, the co-insurance payment percentages, the maximum allowable charges, applicable annual deductibles, whether the deductible's been met, co-payment amounts (fixed upfront fees for procedures), procedure frequency limits, claims address if you don't have it, etc.

Thinking "100 percent" always means "free to the patient." That 100 percent doesn't mean no out-of-pocket expenses, especially if you see a non-contracted provider. If you see a provider who is non-contracted for a PPO plan or you're in an indemnity plan that 100 percent is based on a maximum allowable charge (MAC). The plan will pay the provider the applicable percentage of the MAC and the patient will pay any difference to the provider. The MAC still applies if you must submit a claim for reimbursement.

Confusing co-payments and deductibles. A co-pay is a fixed fee charged whenever that procedure is performed. A deductible is an annual charge to be paid before the year's insurance benefits begin. It's included in the balance for the first procedure of the year requiring a deductible.

Asking, "Do you take the plan?" to descry whether a provider is in contract for a PPO plan. You should ask this question only after you've established that the provider is non-contracted. All providers can take a PPO plan. Instead ask whether the provider is in contract, participates in or is in network for the plan--which are all synonymous. If the provider says the office is non-contracted and you still want to see that provider then it's a matter of whether the provider takes the plan. If so then the provider will submit a claim to the insurer for the procedures performed and balance bill you any difference. If not the provider will ask you to pay for all services upfront and then it's upon you to request reimbursement from the insurer.

Not confirming that the directory of contracted providers is still accurate. Remember, the published directory of participating providers is a year old. A listed provider may have changed offices, retired, closed the practice or dropped or been dropped from the plan. If you are seeking to stay in network ask the provider whether the office still participates in the plan before setting an appointment. If you don't verify this before treatment you may get an unpleasant and costly surprise.

Assuming the provider knows that your company has changed insurers. You should know this before treatment and inform your provider of this change before or during your visit. Don't expect the provider to know and keep abreast of every change your company's plan administrator makes, especially a provider who participates in or takes numerous plans.