Do You Know What Kind of Health Insurance You Are Really Buying?
A Discount Plan Is Not the Same as PPO Insurance
Shanti
8/8/20262 min read
Do You Know What Kind of Health Insurance You Are Really Buying?
When shopping for health insurance, a low monthly premium can be attractive. However, plans with similar prices may provide very different levels of coverage.
Before enrolling, it is important to understand whether you are purchasing comprehensive health insurance, also known as Major Medical insurance, or another type of health coverage with different benefits and limitations.
What Is Comprehensive Health Insurance?
Comprehensive health insurance, also known as Major Medical coverage, is subject to certain state and federal requirements and consumer protections.
Common types include:
HMO: Health Maintenance Organization
PPO: Preferred Provider Organization
EPO: Exclusive Provider Organization
What Does Comprehensive Health Insurance Provide?
Major Medical health insurance generally:
Covers preexisting conditions.
Covers medically necessary services.
Provides prescription drug coverage.
Provides an appeal process if certain claims or prior authorization requests are denied.
How Can You Tell if a Plan May Not Be Comprehensive Health Insurance?
A lower price does not necessarily mean that a plan is bad. However, it is important to carefully review its limitations.
A plan may not be traditional Major Medical insurance if it:
Does not cover preexisting conditions.
Is not ACA compliant.
Provides coverage for a limited period.
Places specific dollar limits on medical benefits.
Pays fixed amounts for services such as hospitalization.
Requires multiple policies, application fees, or association membership.
These features may indicate that the plan provides more limited coverage than traditional Major Medical insurance.
What Other Types of Health Coverage Are Available?
Other options may include:
Short Term Health Plans
Limited Benefit Health Plans
Discount Health Plans
Subscription Health Plans
Health Care Sharing Ministries
These options may be useful in certain situations, but they should not automatically be considered equivalent to comprehensive health insurance.
A Discount Plan Is Not the Same as PPO Insurance
Some discount or limited health plans may provide access to a PPO network. However, access to a PPO network does not necessarily mean that you have PPO Major Medical insurance.
A provider network and the type of insurance coverage are two different things.
Simply seeing the words “PPO Network” is not enough to determine what kind of health coverage you are purchasing.
What Questions Should You Ask Before Buying?
Do not ask only:
“How much is the monthly premium?”
Also ask:
Is this Major Medical health insurance?
Is the plan ACA compliant?
Does it cover preexisting conditions?
Are my prescription drugs covered?
What are the deductible and maximum out of pocket costs?
Are there limits on hospitalization or other medical benefits?
What services or conditions are excluded?
Are my doctors and hospitals in network?
If I receive a large medical bill, how much will the plan actually pay?
The Cheapest Plan Is Not Always the Least Expensive Choice
A plan may have a lower monthly premium but leave you responsible for significantly more of the cost when medical care is needed.
When comparing health coverage, consider the type of insurance, limitations, exclusions, provider network, prescription drug coverage, and your potential financial responsibility.
Before enrolling, make sure you understand exactly what type of health coverage you are purchasing.
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