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How Does My Health Plan Work?

When you shopped for health insurance on the Health Insurance Marketplace, you chose a type of health plan --  likely a Health Maintenance Organization (HMO) or a Participating Provider Option insurance plan (PPO). Keep reading to learn more about how your specific plan will cover you and your family.

Health Maintenance Organization (HMOs)

HMOs are a type of health plan that gives you access to certain doctors and hospitals, often called network or contracting doctors and hospitals (sometimes called "providers").

HMO basics:

  • When you sign up, you select a primary care physician (PCP) from a network of doctors.
  • Your PCP is your first point of contact for most of your basic health care needs.
  • Women can also select an OB/GYN for obstetrical and gynecological care.

If you need special tests or need to see a specialist, your PCP will give you a referral to see another doctor.

The bottom line:

  • HMO plans generally have lower up-front costs, or premiums, than other types of plans.
  • HMOs usually feature copayments as well. Copayments are set amounts (usually a dollar amount or a percentage) that you pay for care. An example of a copayment is $20 for each office visit.
  • HMO plans generally provide coverage only when you use doctors, hospitals and specialists that are in the network.

If you seek care outside the network, other than in an emergency or with authorization from your HMO, your care typically will not be covered at all.

Participating Provider Option (PPOs)

Like HMOs, PPOs often feature a network of doctors, specialists and hospitals; however, there are some key differences between the two types of plans.

PPO basics:

  • With a PPO insurance plan, you don't have to choose a primary care physician.
  • You have the option of receiving care from doctors, hospitals and specialists in the network or outside the network, and you don't always need a referral to see a specialist.

Key features:

  • PPO insurance plan premiums are often (but not always) higher than HMO plans, which means you'll have to pay more up front.
  • When you receive care from a doctor or hospital that is in the network, your costs tend to be lower.
  • When you receive care from a doctor or hospital outside the network your costs are likely to be higher, and you may be responsible for the difference between the amount your insurance plan pays and the provider's billed charges.
  • PPO insurance plans usually have a deductible. So, for example, if your PPO insurance plan has a $500 deductible, your coverage doesn't begin until you've paid out-of-pocket for the first $500 of your own medical expenses. Preventive care services are not subject to the deductible.

Your Total Health Insurance Cost and the Network

Your network is your lifeline to convenient care. Direct care is provided by the providers within your health plan’s network. A specific network of doctors, hospitals and other health care professionals-- sometimes called providers -- helps keep your premiums low for a number of reasons:

Network doctors and hospitals have agreements with the insurance company that save you money

Services are provided at a lower rate to members

When you choose care outside a specified network, benefits and costs can change. Every plan is different, however, some plans provide limited coverage and others offer no coverage at all for out-of-network services. Since doctors, hospitals and other health care professionals outside the network don't have an agreement with your insurance company, the price of services – and your share of the costs for those service - may be higher.

Helpful Materials

Paying for Health Care

Paying for Health Care

Click here to download
Snapshot on the New Health Care Law

Snapshot on the New Health Care Law

Click here to download

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