Health Insurance, Explained

About Health Insurance

Sometimes, health insurance can be complicated — so it’s important to know a little about it. Understanding how your particular plan’s coverage and benefits work will go a long way in helping you get the most out of your health care.

Below is some basic information you need to know about health insurance. If you have specific questions about your plan, be sure to call your insurance provider for the answers.

Common Insurance Terms

PPO or Preferred Provider Organization

A PPO is a healthcare organization made up of doctors, hospitals, and other providers of healthcare services. As a general rule, purchasing a PPO health insurance plan will give you access to a range of healthcare providers who have contracted with the insurance plan to provide services at a reduced fee. In a PPO, you have the option of going outside the network if you choose to (usually for a higher fee) and healthcare services are paid for as you receive them.

HMO or Health Maintenance Organization

An HMO is a healthcare organization that combines a range of services within a single network. In an HMO, patients receive services only if those services are a part of the network. As a member of an HMO, you pay for healthcare services in advance in the form of a scheduled fee. HMOs also usually have a more restricted list of providers, may have stricter rules on obtaining care from specialists, and tend to have lower deductibles and other out-of-pocket costs.

EPO or Exclusive Provider Organization

An EPO can act in the same manner as either a PPO or an HMO, depending on how your insurance plan defines it. Typically, there is no coverage for services outside the EPO, however some EPOs incorporate features of the HMO when obtaining care from specialists, such as requiring a primary care doctor’s referral.

Deductible

Generally, a deductible is a flat, annual amount that you must pay before you can use the insurance plan’s benefits. For example, if your deductible is $500, then you must pay $500 before the insurance plan will pay any of your medical expenses.

Copayment and Coinsurance

A copayment is an amount you must pay each time you have a service, such as a doctor's office visit or a visit to the emergency room. Often, you can find copayment information on the back of your insurance card.

Coinsurance is the amount an insurance plan applies to medical services and typically is a percent of the full service. Most coinsurance obligations have an annual maximum amount and once you reach it, you do not owe any additional amount for the remainder of the plan year.

EOB or Explanation of Benefit

Most insurance plans will send you an EOB each time they process a payment to a healthcare provider. The EOB tells you exactly how much the insurance plan paid to the healthcare provider and how much you owe.

Coordination of Benefits

Dual Coverage

When you and your spouse or partner both have insurance, John Muir Health coordinates your coverage. When you are the patient, your insurance acts as the primary insurance and pays for services first. Any amount you owe after that, John Muir Health bills to your partner's insurance plan, which provides secondary coverage. When your partner is the patient, her insurance policy acts as the primary insurance and yours becomes the secondary insurance.

Coordinating Benefits for Dependents

When the patient is a dependent on both your insurance plan and your partner’s or spouse’s insurance plan, then the Birthday Rule applies to determine which plan covers your dependent. The Birthday Rule is when the parent or guardian with the earlier birthday acts as the primary insurance carrier. For example, if the child's mother's birthday is in March and the child's father's birthday is in July, then the mother's insurance is the primary insurance and the father's insurance is the secondary insurance.

Network Limitation

Physician Networks

The physician network is the group of doctors the insurance plan contracts with. With PPOs, HMOs, and EPOs, there is usually an associated physician network that you must use to get the services you need.

There can be a number of restrictions about seeing doctors who are not “in-network,” including financial penalties or coverage limitations. Since this varies so much and the insurance plan sets the benefit payment rules for "in-network" and "out-of-network" providers, you should talk to your insurance carrier about the details.

Finding Out if My Doctor or Hospital is In-Network

The insurance plan decides which providers (such as a doctor or hospital) are "in" or "out" of the insurance plan’s network. Often, the designation depends on whether or not the insurance plan has a contractual arrangement with the provider, although that may not always be the case. To be certain about your coverage, you must check with your insurance plan about a particular provider's status.

Billing

Deductible and Coinsurance Amounts

As part of John Muir Health’s billing process, we ask your insurance plan to tell us about your deductible and coinsurance amounts and bill you accordingly. If you disagree with a deductible or coinsurance amount on your bill, contact your insurance plan to see how it calculated the amount.

At Least Two Bills: Each Doctor and the Hospital or Facility

The doctors who practice at John Muir Health’s hospitals are independent contractors and not employees of the hospital. As independent contractors, they bill for their services separately — as does the hospital.

If you see multiple doctors during your stay in the hospital, then you will receive a bill from each of the doctors who provided care to you during your stay. Sometimes, this includes doctors you may not realize provided care to you, such as the radiologist who read and interpreted your x-ray.

Some Doctors are Not In-Network Even Though The Hospital Is

As independent contractors, the doctors who work in our hospitals are free to contract with any health plan. Because these doctors are independent, the hospital does not require that they be "in-network."