The Product
Your health insurance benefits are provided through an insurance company that offers various products (watch our video at healthcarenavigation.com/videos) with different parameters (referred to as “Plan design”), packaged in an annoying array of abbreviations which are unintelligible to most consumers.
Was it always this way? No, this is a modern phenomenon associated with the evolution of health insurance. Health insurance is a vital protection but the existence of health insurance also drives up healthcare costs. Structuring benefits into products is one of the many tools to try to mitigate the rising costs of healthcare.
In the beginning people paid cash for medical services. Then there was insurance structured like major medical policies with the insurer and patient sharing payment for a claim like original Medicare is structured today. And then, managed care brought us most of these other terms and structures.
Moving beyond the history of healthcare, you should know many things about your coverage including the product. The product will provide clues about rules you must follow and access to providers. Here are common products:
- Health Maintenance Organization (HMO)
- Exclusive Provider Organization (EPO)
- Point of Service Plan (POS)
- Preferred Provider Organization (PPO)
- High Deductible Health Plan – typically a PPO combined with a health savings account (HSA) or health reimbursement account (HRA)
Be aware that knowing which product you are on does not provide all the information you need. For example, there are PPOs with only in-network benefits but with a broad national network, PPOs with a more regional network and out-of-network benefits and PPOs that are open access and provide some coverage to any provider one might choose to see. Similarly, there are “brick and mortar” HMOs like Kaiser Permanente and HMOs that contract with doctors in private practice in the community.
We encourage you to watch every video in our video series to learn more about your coverage. It’s not just knowledge for knowledge’s sake, understanding our complex field is a skill that will always serve you well.
