What Hawaii Health Insurance Customers Should Know

What Consumers Should Know About Health Insurance

PPO vs. HMO.

You should be aware of the difference between a preferred provider plan and a health maintenance organization. A preferred provider plan has a network of health care providers who contract with the health plan and are called participating providers. If you go to a provider outside the network, your out of pocket costs will be substantially higher. A health maintenance organization has a closed network of providers. You can only go outside the network if the health plan authorizes you to do so because the required services are not available within the network or if you are on the mainland and need emergency or urgent care. Choosing between a preferred provider plan and a health maintenance organization is a matter of personal choice and there are pros and cons to each. Differences can be researched with the health plans or on the Internet. Note that there may be hybrid products available such as a point of service plan that incorporates elements of an HMO and PPO.

Cost-sharing.

Health insurance does not pay for everything. A health maintenance organization requires that you pay copayments for certain services, which can be a flat dollar amount or a percentage of the applicable charges. A preferred provider plan requires that you pay a copayment which is a percentage of the amount paid by the health plan to the provider. This percentage is higher for non-participating providers than for participating providers. Also, if you go to a non-participating provider, you must pay the amount charged by the provider above the health plan reimbursement. This is because non-participating providers do not have a contract with the health plan to accept the negotiated reimbursement amount. These matters are set forth in your summary plan description and you should read that carefully. You should also be aware that some preferred provider plans have a much lower reimbursement for non-participating providers than for participating providers. Cost sharing provisions can result in your being out of pocket a substantial sum of money. Before you undergo treatment, find out from your healthcare provider what your out of pocket payment will be. Most health plans place a maximum limit on your total annual cost-sharing. If you read your health plan to find out what this limit is, you will know how much of a reserve to maintain for these costs.

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