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The Basic Terms

Understanding Health Insurance in Changing Times

Typically I write about health issues but I figured that it might be a good idea to write a strictly practical  article about insurance..

Most people who come in for care have absolutely no idea what insurance industry products they have mean to their care or their freedom to move within the healthcare system until they get sick. Here are some basics that are helpful/imperative in understanding what you might be carrying in your pocket….The affordable care act has changed many things but these basics are still more or less all the same and you should be familiar with the language and terms well before you need to use them.

PPO:

A type of insurance policy that gives you much greater ability to self refer to specialty and use your insurance benefits without as much of a “gatekeeper” (primary care doctor in complete control) situation. These are typically more desirable for just this reason. They can be high, low or no deductible. Providers usually participate with these plans to be sure, but often times you can even go “out of network” and be reimbursed at a predetermined rate by your insurance co. if the provider is “out of network”.  These policies are usually considered the best option

HMO:

This is a type of policy that more typically limits your freedom to move about the system. Most times, though not always, referrals are controlled and kept within organizational structures such as one hospital system or group. Usually any referral to a specialist needs to go through the primary care doctor and often times thing such as special studies (MRI, CAT SCAN) are more strictly controlled. These can also be high, low or no deductible. These are usually less desirable and cheaper because of the freedoms you give up when compared to PPO structures. Personally, for my own coverage I have always stayed away from them as I have have seen many instances over the years where people have needed things and not gotten them because of the tighter controls in this scenario.

HEALTH CARE SAVINGS ACCOUNT (also called Medical Savings Account):

These are vehicles provided by employers, or sometimes small business owners for themselves) That allow you to pay for medical procedures not covered by insurance and use this as a “Pre Tax” expense.

I.E. If you have one of these accounts and you want to get glasses, or a massage or co-pays or something that might not go through your insurance, you can pay from your pre tax account. Many times, employers will give employees an amount annually that is the same as the insurance policy deductible. These scenarios beneficially effect the employers tax structure and are great for everyone. If you have the opportunity to self fund one of these accounts, it is a very good idea if you plan on using any services over the year.

……These are a VERY GOOD IDEA and with a doctors note stating necessity you can have all sorts of things paid as a pre- tax expense.

CO PAY/PERCENTAGE:

.a copay is the fixed amount that you would spend at a doctors visit or for a procedure If your policy has this instead of percentage coverage. Percentage coverage means that you would owe a percentage of the fees to your doctor out of pocket. (These are often in combination with or after deductible amounts have been reached) see below

DEDUCTIBLE :

A deductible is the amount that you must spend before your insurance benefits effectively “kick in” (usually except for a yearly physical which is often covered as preventative). When you have a deductible of, say 2000.00 dollars, this means that the first two thousand dollars in expenses for your policy year comes out of your pocket. While this sounds awful, the reason for this is to allow for lower premiums… In essence, you either pay more for the lower deductible policy, or you pay for the services up to this threshold. If you have a policy without a deductible you might be paying 600 per month for the policy… if you have the same policy with a 1000 dollar deductible you would likely be paying 500 per month… so 1000 less a year roughly… The deductible is a way to keep policy costs lower in years that you do not have need and frankly it is a disincentive for you to use your benefits as you feel like you are paying for something that you should not have to. In reality you should happily spend the money if it will help you stay healthy, knowing that you are just spending what you would have spent anyhow if you didn’t have a deductible (See Health Care Savings Account above-and then go talk to your human resources dept. to make them start one). Another thing to consider is that Insurance companies process procedures at different rates and this can be very confusing, but the allowed costs of procedures as set by the different insurers can affect how quickly your deductible get’s eaten up. A doctor might bill 50 for a procedure and insurance company might “allow” 40 while another might allow 20 for the same procedure. What the company allows is what goes to the deductible, not what the doctor bills. The amounts are adjusted by the insurance company. If you have the 20 amount allowed procedure 10 times you will have to pay 200 and have eaten up 200 of your annual deductible amount. Confusing, definitely…

PRE-APPROVAL & REFERRAL:

Always call your insurance company to ask if any procedure require pre-approval or referral. If it does.. GET IT. If you do not they will likely be very happy to laugh at you when you cry to them over an unpaid bill. As a participating chiropractor for most of the networks these are rarely an issue but with all procedures it is a must check scenario for you, the patient.

SPECIALTY BENEFITS:

Don’t assume that every service is covered… call your insurer first.

some policies cover some things but not everything (Acupuncture, Chiropractic etc.. can be policy additions and are sometimes not built into the base policies. ) Even though these services can be cost saving over surgical procedures the insurance industry still does this.


Though I could go on for days (and likely bore everyone to death) I will stop here as I feel that if you have a good understanding of these terms and concepts , now you are  at least armed with the basics.  whether  you have to walk into HR to pick a new plan or show up at the hospital with a broken arm, as long as you fully understand what this stuff means you will be better able to negotiate the system.  I know this collection of terms is a bit on the dry side, but that isn’t always a bad thing when it comes to information.  If you have any questions about something not covered here you can always reach me by email at dr@drpetermcmanus.com


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Dr. Peter McManus

A bit about me… I’m a Graduate of Palmer Chiropractic College (Iowa 1995) and am now in practice in Lincoln Park and Downtown in the Loop in Chicago. I’ve trained in various topics- neurology, sports injury, gait analysis, rehabilitation, treatment of extremities, standards of practice, whiplash injuries and various other topics since I have been in practice. I have worked closely with university health clinics and hospital rehabilitation departments, have lectured to state regulatory agencies as an expert in standards of practice and have been a teaching participant in the orthopedics rotation of NMC hospital. I specialize in traditional treatment methodologies and I firmly believe that  a combination of rehabilitation and a proper short care plan of chiropractic treatment is the best approach for almost any musculo-skeletal condition. Visit facebook.com/PeterWilliamMcManusDc for more information or to subscribe to my free monthly newsletter and to stay plugged in with its healthy tips and current relevant research links.

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