Choice Enrollment Blog
While health insurance greatly benefits many people, it is also a very complex system. Give some terminologies regarding coverage and policies to a person who knows nothing about insurance and all is lost. But, as a policyholder, it is important to be familiar with the words and terms in your plan because it pays to know what you are getting out of it.
Let us go through some of the basic definitions of health insurance to help you understand this confusing jargon.
Health Maintenance Organization (HMO) is one of the major types of health insurance. It means that every one of your health care service should come from your doctor. You will need a referral prior to consulting with a specialist. It does not apply in emergency cases.
Preferred Provider Organization (PPO) is another major type of health insurance. This is more flexible, as you are allowed to any healthcare provider even without a referral. However, you may pay more if you choose a specialist who is not in your network.
HSA is the abbreviation of Health Spending Accounts. It is used for medical expenses. A certain amount of money will be put away and be used for the costs of medical treatments. It is the same with 401(k) retirement account.
It refers to Health Reimbursement Arrangements. Employers generally set up these funds. Your own health insurance does not cover it, but the HRA fund by your employer is used to reimburse your medical expenses.
Coordination of Benefits
Coordination of benefits works when you buy two insurance policies. Both policies should work together so you can take full advantage of their benefits. You need to submit a coordination of benefits form to minimize out-of-pocket expenses and claims become faster.
Step therapy enables you to buy higher priced drugs when the lower priced ones are not effective in treating your ailments. Even if your physician prescribed the cheap medication, you can change to expensive drugs and they will be covered by your insurance. But, you should try the first prescription medication first to find out if they are really not effective.
In this case, your insurance company needs to review your prescribed drugs before you are given coverage. You need prior authorization because the insurer needs to determine if it is the right medication for you. Certain drugs need authorization first if:
Hopefully, health insurance is not that confusing anymore with the help of these definitions. For further explanation, an insurance agent has enough knowledge about health insurance. At Choice Enrollment, we put our clients first by offering them policies that they can afford. Learn more about our products and services by calling our agency at (719) 481-1616 You can also request for a free quote by CLICKING HERE.