Health insurance Introduction | MyHealthcareFinances

Health insurance is away to help you manage health care costs.It covers certain medical costs for illness, injuries, or other conditions.
Depending on your plan, you will pay your health insurance company a monthly rate and they will pay for some or all of your medical costs.
Be sure to talk with your health insurance company about any questions or concerns you may have about your options.

What Does Health Insurance Cover?

Examples of what is typically covered by health insurance: Doctor’s visits, in-patient and out-patient hospital care, and prescription drug coverage.
What is covered by a health plan will vary by type of insurance and the plan you choose.

Fee-for-Service

A health care provider is paid a fee for each service provided.
With these plans, you can go to any provider willing to see you. You pay for a portion of your care, and the health insurance company pays the rest.

Managed Care

Health care providers contract with a health insurance company to be a part of its network.
If you go to a health care provider in the network, they have agreed to a certain payment rate for treating you, also called the “allowed amount.”
You typically pay a portion of the allowed amount, depending on your plan.

What is In-Network vs. Out-of-Network?

In-Network: Refers to healthcare providers who have a contract with your health insurance company to provide you with care or services at a discounted rate. In-network costs are usually less expensive for you than out-of-network costs.
Out-Of-Network: Refers to healthcare providers who do not have a contract with your health insurance company to provide you with care or services at a discounted rate. Out-of-network costs are usually more expensive for you than in-network costs.

What are Common Types of Managed Care Plans?

Your health insurance card should tell you what type of plan you current have!

Health Maintenance Organizations (HMOs): Your health care services start with your primary care physician. You usually need a referral for your care to be covered with specialty health care providers, except in an emergency. Generally, HMOs have smaller networks of health care providers, and health care providers outside of the network will not be covered. While you may have less choice in providers, HMOs are often less expensive.
Preferred Provider Organizations (PPOs): Generally, you do not need to start with your primary care physician. While most PPOs have some out-of-network coverage, staying inside the network means lower out-of-pocket costs. Typically, PPOs cost more than HMOs, but you have more choice and control.
Exclusive Provider Organizations (EPOs): Generally, you do not need to start with your primary care physician. Typically, EPOs have larger provider networks than HMOs, but will not pay for any services obtained outside of the network.
Point of Service (POS) Plan: In general, think of a POS plan as an HMO that covers out-of- network doctors. POS plans typically come with higher premiums than HMOs.

For a closer look at health insurance financial terms and prescription drug terms:

Visit the Words that Matter for Health Insurance micro-module

Print

Loading

Download in PDF

Loading

Disclaimer: The information on this site is intended for U.S. residents only and is provided purely for educational purposes. Health, legal, regulatory, insurance, or financial related-information provided here is not comprehensive and is not intended to provide individual guidance or replace discussions with a healthcare provider, attorney, or other experts. All decisions must be made with your advisers considering your unique situation. © Triage Cancer & Pfizer Inc. 2024

Health Insurance can be confusing, so let’s take it one step at a time and get started with some foundational concepts that will support you in making informed decisions.

What is Health Insurance?