10 Editions?! Time to Recap...

Happy Friday!? We’ve reached the 10th edition of this newsletter (I can’t believe it, already!), and with everything we’ve covered so far, I think it’s a good time to recap, review terms and make sure we’ve got a decent understanding before we move into the next set of topics.? Sound good?

Let’s dive in.

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Common Terms – and how you’ll share cost for your healthcare:

Deductible: Your responsibility to pay before the insurance company starts to pay claims.? Your deductible is different for in-network and out-of-network services.? You’ll always pay the carrier’s negotiated rate for services in your deductible.

Co-Insurance: Your cost sharing for services after your deductible.? This is a percentage of cost (anywhere from 10% - 40% depending on the health plan), that you’ll pay for services until you reach your out-of-pocket maximum.

Copay: A flat cost for services received, usually office visits and prescriptions

Out of Pocket Maximum: The most you’ll ever spend in a year.? Once you hit the out-of-pocket maximum the insurance company pays services at 100%. This is for in-network services ONLY.? If you go out of network, you’ll always be balanced billed, even after you reach the out-of-network maximum.? Out of pocket maximums are based on the allowed amount (aka in-network rate) and any cost more than the allowed amount does not accumulate towards a maximum or a deductible.

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How you receive care – and what different coverage models mean: Article here

HMO: Health maintenance organization.? You see a primary care physician first and they refer out to specialists when needed.? You cannot self-refer to a specialist in an HMO model. No out-of-network coverage, except in an emergency.

PPO: Preferred Provider Organization.? This model utilizes a network of doctors, labs and hospitals just like an HMO.? However, you can self-direct your care and go directly to the provider you want to see, without seeing a primary care physician first. Some out of network coverage, but you’ll be balanced billed for services.

EPO: Exclusive Provider Organization. A hybrid between an HMO (no out of network) and a PPO (you can self-direct your care).

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The Twist: Article here

High Deductible Health Plan: HDHPs can be HMOs or PPOs.? These plans have high deductibles, are compatible with Health Savings Accounts (HSAs) and do not have first dollar coverage like a traditional HMO or PPO does.

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Pharmacy Nuances: Article here

Generic: A lower cost medication, usually not subject to a deductible.

Brand Name: A higher cost medication, sometimes new to the market.

Specialty: Medications to treat very specific conditions, sometimes delivered via infusion or injection.? Specialty scripts tend to run thousands of dollars per prescription.

Formulary: a list of medications that the insurance company has negotiated pricing for

Non-Formulary: medications not on the negotiated price list

Step Therapy: a way to control costs.? Insurance companies require members to try lower cost medications and show adverse effects prior to covering a more expensive medication.

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Getting Stuff Paid For: Articles here and here

Contracted: Healthcare’s magic word.? If a provider isn’t contracted it means they aren’t in-network.

Prior Authorization: The process a provider must complete for certain procedures and medications prior to the patient being treated and before the insurance company pays for it.

Accumulator: Deductibles and out-of-pocket maximums.? Dollars spent on services are tracked each year and benefits change as you hit different thresholds.

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Tax Advantages: Articles here and here

FSA: Flexible Spending Account (annual limit); pre-tax dollars, use-it-or-lose-it.

DCAP: Dependent Care Account (annual limit); pretax dollars, use-it-or-lose-it.

Commuter: Pre-Tax funds for commuting expenses, with a separate monthly limit for parking.

HSA: Health Savings account (annual limit); pre-tax dollars you keep. Only available alongside a qualified HDHP.

Limited FSA: Limited Flexible Spending Account (annual limit); pre-tax dollars for dental and vision expenses only. Designed to be used in conjunction with a HDHP and HSA plan.? Use-it-or-lose-it.?