Thursday, July 19, 2018

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Health Insurance

Health insurance is insurance coverage that covers the cost of an insured individual’s medical and surgical expenses. It is designed to protect you from paying the full cost of medical services.  Just like car insurance or home insurance, you pick a plan then pay a premium each month. In return, your health care provider agrees to pay a portion of your covered medical cost.   There are five main kinds of health insurance plans, indemnity plans, HMOs (preferred provider), POS (point-of service) and PPOs (preferred provider).  In 2003, the US congress introduced a new option, the HAS (Health Savings Account), which is a combination of HMO/PPO/Indemnity and savings account, which has tax-benefits.  When choosing a plan, having an understanding of the difference between the plans is extremely important.  

Health Maintenance Organization (HMO)

When you chose an HMO, you work with a primary care physician to coordinate your care through providers.  When visiting a specialist or receiving care, a written referral by your Primary care physician is often required for the services to be covered.  Generally there are no benefits if you choose to see an out-of-network provider.

Preferred Provider Organization (PPO)

PPO Members can receive care from any provider, either in- or out-of network without a referral.  If you want the freedom to manage your own care without referrals, this would be right for you.  Normally your insurance will pay more for services within your network.

Point-of Service Plan (POS)

POS plans are like a mixture of HMO and PPO plans.  With the POS you are required to designate an in-network physician to be your primary health care provider.  You can go out-of-network, but in doing so, you will pay most of the cost yourself, unless a primary care physician refers you.  In that instance, the health plan will pay all or most of your bill.  

The insured person’s obligations may take several forms:


Co-payments are the amounts that the insured must pay out of pocket before the health insurance pays for a particular service or visit. A co-payment must be paid at the time of every particular service is obtained.  Co-pays are separate from policy deductibles and are not included in toward the fulfillment of a deductible.  

Maximum Out-of-Pocket:

These limits are the most money the consumer should pay for medical treatment during one policy year.  Payment of deductibles is always included in maximum out-of-pocket calculations, but not the co-payment amounts.  Always remember that any charges above what are considered as usual and customary by the insurance company will have to be paid by the insured.


Deductibles are pre-defined amounts that must be paid at the time of treatment is rendered, and before the insurance company will contribute toward the total cost of service.  Deductibles obligate the client to share in a larger portion of medical bills. 


Coinsurance is a shared cost of a covered health care service, calculated as a percent of the allowed amount.  You pay coinsurance plus any deductibles you owe. The health insurance pays the rest of the allowed amount.  

Health Savings Account (HAS)

Tax-free savings accounts aimed for saving money for future medical expenses.  Only clients with high-deductible plan and currently have no other health insurance plans are eligible.  The HSAs can be paired with health plan with an annual deductible of over $1,100 for individuals and $2,200 for families.  Normally, health plans with high-deductibles have higher premiums; but, out-of-pocket cost is much higher.  To compensate for the difference, the insured can contribute a certain amount of money to a tax-advantaged account the amount as well as the details of tax benefits vary from year to year.  The contributions can be used to reduce the insured taxable income.  If payments are made by an employer on behalf of an employee, they are tax free.  HAS plans can help pay expenses that the insurance doesn’t pay cover, such as hearing aids.  
With access to multiple Health Care Insurance Companies, our agents at Morris & Spradlin Insurance Group can provide different rate options and give you the flexibility to choose a coverage level that matches your needs and budget.  Give us a call and let us assist you with providing Health Insurance Coverage for you and your family.