Understanding Health Insurance Coverage – Part 1
When it comes to health insurance, the prospect of obtaining adequate coverage can be overwhelming. Obtaining the right coverage can feel nearly impossible, and can be the cause of steep financial burden. It’s easy to become disillusioned by the sheer volume of policies available and the specifics of what each covers.
For those who have little to no health problems and don’t suffer from any chronic pain, health insurance coverage may not be as cost prohibitive, though it’s always important to be fully informed when selecting a policy.
However, for those who have been injured in an accident and require more healthcare coverage for lifelong pain, surgeries, and medications–they must select insurance accordingly (and when coverage becomes cost prohibitive, it can become the source of mental anguish for a victim and his or her family).
Within this brand new article series we’ll explain insurance coverage and go in-depth on the numerous policies available to our large population of readers, similar to the detailed information we provided in our Car Insurance series. It’s important for every demographic (millennials, baby boomers, the elderly, accident victims of all ages with long-term care needs, and everyone in between) to fully understand their options and make well informed decisions on what healthcare coverage may be right for them now, as well as in the future.
What is health insurance?
Before we can delve into the types of health insurance coverage available to every demographic, we must first understand what health insurance is and what it isn’t. Simply put, health insurance is defined as:
“Health insurance is a type of insurance coverage that pays for medical and surgical expenses incurred by the insured. Health insurance can reimburse the insured for expenses incurred from illness or injury, or pay the care provider directly.”
Now that we’ve established the definition of “health insurance”, we’ll take a closer look at common insurance terms and what they mean for policy holders. The terminology associated with health insurance is often difficult to understand and the fine print can be a headache, especially for those who have been injured in an accident and simply want to ensure they can receive the necessary treatment for their pain and suffering.
Authorization: This is a term that often causes headaches around doctors’ offices and in households that require longterm care alike. After an injury, a victim may need a surgical procedure, physical therapy, or medication in order to recover and restore quality of life. However, insurance companies don’t always allow accident victims to receive care simply because they’re insured. That’s where “authorization” or “prior authorization” will come into play, and it greatly hinders those with lifelong medical needs ability to obtain the proper care in a timely manner.
Healthcare.gov defines the practice of obtaining authorization as follows:
“[…]A decision by your health insurer or plan that a health care service, treatment plan, prescription drug or durable medical equipment is medically necessary. Sometimes called prior authorization, prior approval or precertification. Your health insurance or plan may require preauthorization for certain services before you receive them, except in an emergency. Preauthorization isn’t a promise your health insurance or plan will cover the cost.”
Beneficiary: the beneficiary of an insurance policy is the person who is covered by that policy. This person is also referred to as the “insured” and it is whom the insurance pays to “insure”.
Co-payment: a co-payment is the term used for the payment made by the insurance beneficiary (“insured”) that’s paid alongside the insurer’s payment for services rendered. Co-payments range from small amounts for things like doctor visits to larger amounts for surgical procedures. Medication may also require the beneficiary (“insured”) to pay a copayment (nicknamed “co-pay”) to obtain their necessary medications. No two insurance providers have the same co-payment policies, and therefore it’s important to thoroughly research the financial responsibility of the insured before selecting coverage.
HMO: Also known as a Health Maintenance Organization. Within an HMO policy, doctors are placed within what’s known as a “network”. Within this network of physicians, the insured selects whichever one they choose, and the services may be covered in full or for a very small co-payment. The doctors who make up the network have agreed to lower the cost of the services they render to patients and often, an authorization is not required for their office visits. Hospitals are also included in this network, and services they render may also not require authorization. Each policy is different, and it’s important that the insured and their family select a plan that offers the least “resistance” in order for them to receive the care they need after illness or life-threatening injury.
PPO: Also known as a Preferred Provider Organization. This type of insurance coverage is far more expensive, however, it allows for a wider availability of doctors, hospitals, and pharmacies at which to receive treatment and medication. For those who can afford a PPO, authorizations are not a requirement under normal circumstances. Unfortunately, many accident victims cannot afford to acquire a PPO, and are forced to endure the HMO runaround (the will they? won’t they? of insurance companies should not be forced upon accident victims!), leaving them without care, or with inadequate care.
Provider: This one is quite easy! A provider is simply a doctor, hospital, pharmacy, or any other person or entity that renders care to patients under the health insurance policy terms.
Up next: the business of selecting a policy, simplified
In Part 2 of our Health Insurance series, we’ll explore the “business” of selecting a policy and provide truthful, accurate insight into what our readers must know–and what the insurance companies won’t share–about what health insurance coverage is available. We’ll provide special insight into what accident victims must know in order to receive the care they’re entitled to from their insurance coverage (this after retaining board certified counsel, of course)!