Understanding Health Insurance Networks
If you’re shopping for individual, group or Medicare supplemental insurance, you may find all the different network acronyms confusing. In this post, we will better explain what these mean and how they affect your chosen coverage.
We’ll take a deeper look into each type so you can decide which one is best. A Medicare Advantage HMO is very different than an individual PPO plan for instance. The information below will make your insurance search a little easier.
PPO Health Insurance Plans
PPO stands for Preferred Provider Organization. Generally speaking, it will be your largest and best network. Almost all group insurance (employer offered) plans are PPOs. They are considered to be the best because they offer the most flexibility. For example, you don’t always need to select a Primary Care Physician and you can visits other doctors without a referral in most cases.
With a PPO, you can receive care both in and out of your chosen network. Like all policies, you will pay the least when working with doctors and hospitals that are considered “in network.” However, you can seek care out of network, but you will pay more – and your out of pocket exposure will be higher. So it’s best to stay in network, but it’s nice to know you won’t pay the full cost when receiving care out of network.
All major insurance companies will have their own PPO plans. However, most health care providers accept PPO insurance policies from several different insurance companies. It’s not unusual to see the same doctor accept Aetna, Anthem BCBS, Cigna, Humana,United Healthcare and so forth.
Unfortunately, it’s become very difficult to find individual ACA-type health insurance plans offering PPO coverage at this time. Hopefully this changes – time will tell.
There are several PPO options in most states for Medicare Advantage coverage and medically underwritten short term health insurance plans, but not individual coverage. It can be debated how much of this is attributable to the ACA (Obamacare) changes, but PPO plans are much more prevalent in employer group, Medicare Advantage and short term policies.
HMO Insurance Networks
As mentioned, we see a lot more HMO (Health Maintenance Organizations) plans in the individual market, but they are also abundant in the Medicare Advantage market as well. HMO networks are usually smaller than PPO plans. Insurance companies build these out through arduous negotiations in order to keep the cost of care lower. With many HMOs you’ll need to see select a PCP – and this doctor will be your gatekeeper for referrals and specialists.
Additionally, HMO networks can be smaller than the “in network” side of PPO plans – and you usually cannot go out of network for care. Unless it’s an emergency, you will pay the full cost if you venture outside of your HMO network for care. Thus, you have to be careful with an HMO while also being aware of which local providers and facilities you can use.
One item worth pointing out is that we see a lot of very strong HMO Medicare Advantage plans – much more so than with individual Obamacare insurance. It’s always important to make sure your doctors and hospitals are in network with an HMO Advantage plan, but many of them are. And that can result in much lower out of pocket exposure to you, the insured.
The bottom line is that Medicare Advantage HMO plans can be very suitable for many, but you if you’re not Medicare eligible and in an Obamacare plan, the networks can be quite restrictive. Again, we hope this shortcoming gets addressed sooner than later.
Point of Service – POS Insurance Plans
Point of Service network plans are both parts HMO and PPO. The feature that makes these more like an HMO is that you may be required to to seek referrals through your Primary Care Physician (PCP). Your doctor can then make referrals to network and non-network specialists for care. Like all health networks you save money by using the in network, preferred providers, but you may not pay the full cost if you’re out of network.
With some POS plans, you may not be subject to the deductible or coinsurance for services provided by your PCP. This saves you (and the insurance company) money when you get the majority of care at your PCP rather than seeing specialists for more routine items. Aetna is one insurance company where we see Point of Service networks the most. These networks are more common with traditional plans; we don’t often see POS networks in the Medicare markets.
What About Medicare Supplement Insurance?
You may have noticed that we have not addressed Medicare supplement insurance networks up to this point. There is a reason for that. By in large, Medicare supplements don’t have networks. Save the for rarely purchased “Medicare Select” plans, your Medicare supplement has no bearing whatsoever on where you can go or who you can see for care.
This is a common misunderstanding when it comes to Medicare supplements. Medicare is your primary coverage. If your provider accepts Medicare patients, then they will accept most any traditional supplement you present them with. Your supplement starts paying once Medicare stops. The two work in tandem, of course, but a supplement is not an insurance policy with a network that must be used.
It does not matter which supplemental insurance company you choose. Big or small – known or unknown – they all provide the same access to the same hospitals and doctors. They only exist to fill in the large gaps in Medicare.
This is not the case with Medicare Advantage plans, however. Unlike Medicare supplements, Advantage plans DO have networks. In essence, these policies replace Medicare and are only sold by private, individual insurance companies. There are both HMO and PPO plans sold by Aetna, Anthem BCBS, Humana, Medical Mutual of Ohio, United Healthcare and many others. If you choose a Medicare Advantage plan (over Original Medicare paired with a Supplement like F, G, or N) then you should make sure your using their network providers.
Pharmacy Networks
A significant change we have witnessed in both Medicare and non-Medicare health insurance plans are the creation of pharmacy networks.
Insurance companies are eager to save money anywhere they can. And many have partnered with preferred pharmacies in order to reduce the cost of prescriptions. These savings will be passed on to you, the consumer. This will result in lower prescription copays and can also allow the insured to avoid their separate prescription deductible.
This is one area where we see consumers spend more money than needed. Whether you have a Medicare Prescription Part D plan – or an individual, family or group health plan – you need to know which pharmacies give you the best bang for your buck.
Typically, your insurance agent will have a list of preferred pharmacies for your particular insurance plan. It’s important that you make sure you’re using one from the list (or the best mail order option) so you don’t needlessly increase costs. Making sure you use a preferred pharmacy is a great way to save money.
Contact Us For Insurance Quotes And Coverage
Hyers and Associates is a full-service, independent insurance brokerage. We help our clients with individual, group and Medicare insurance policies.
Whether you’re shopping for a PPO, HMO, POS – we can assist you. We’ll help you better understand your options, so that you can enroll in the health plans that are most suitable for your needs.
Category: General Insurance
Last updated on July 25th, 2018