Covered Expenses

With insurance, there are some covered expenses, and some that are not. Let's take a look at the various insurance plans and what is covered, and what isn't. Your covered expenses depend entirely on the type of insurance you have.

With traditional insurance, you are allowed to see any doctor you want. You or your doctor can then submit a claim to the insurance company to be paid back for the expense. There are many expenses, such as well visits, etc. that are covered and require a copay, and others that are covered in full after a deductible is paid. However, not all expenses are covered. For example, cosmetic surgery, diagnostic testing, x-rays, and sometimes pregnancy are excluded. In other words, these are not covered expenses, and therefore, you are not reimbursed for these expenses.

Also, when we talk about covered expenses, it does not always mean covered entirely. Traditional plans probably will not reimburse you for the entire cost of covered expenses. Generally, the insurance will cover 80 percent of the expense, and you will be responsible to pay the remaining 20 percent of costs. This cost sharing is known as co-insurance.

With most traditional insurances, there may be a maximum amount an insurance company is willing to pay. Therefore, you would be responsible for paying 100 percent of any costs over the maximum amount or what is sometimes called the "usual and customary" charges. There may also be a maximum out of pocket that you are responsible to pay, and anything over that amount your insurance will cover. This depends entirely on the plan you choose.

While traditional insurance plans used to be what pretty much everyone had, that is not the case anymore. Now, the most popular types of health insurance are "managed-care plans."

So what are your covered expenses with managed care plans?

First let's better define what a managed care plan is: Managed-care plans include Preferred Provider Organizations (PPOs), Health Maintenance Organizations (HMOs), and Point of Service (POS) plans.

Preferred Provider Organizations (PPOs)
A PPO is the most like a traditional health plan when it comes to covered expenses and choice. You can choose to see any doctor at any time. However, you save money if you choose to see a doctor who is part of the PPO network. The way this works is the PPO contracts with a group of doctors for discounted prices. Therefore, if you choose to see one of these doctor, the costs may be discounted, and you pay less.
As with a traditional plan, the PPO will not pay 100 percent of the costs after the co-payment has been deducted. The percentage that the PPO will pay varies. However, for doctor visits with doctors in their network, they usually pay 80 percent. This means you will then be billed for the remaining 20 percent.

If you see an "out-of-network" doctor, your covered expenses are less; for example, the PPO may pay only 60 percent of the costs, leaving you to be billed for the remaining 40 percent.

Health Maintenance Organizations (HMOs)
Under an HMO, you will need to choose a "primary care physician." This physician is usually a general practitioner. When you have an HMO you are required to visit only those doctors within the established network. If you require care, you will need to visit your "primary care physician" first. If you first visit your primary care physician, and they refer you to see another doctor or a specialist, the visit to the specialist will then be covered under your HMO policy.

Usually you will have a co-payment (usually $10 to $30) at each visit. But there are usually no additional co-insurance amount billed. The entire cost (100 percent) will then be paid by the HMO. However, that is for basic care, and preventive care.

Preventive care is an important aspect of an HMO. Preventive care means seeing your doctor about your health before there is a problem so that the doctor may help you prevent the illness. An HMO will generally cover 100% of the cost of preventive care (immunizations, blood work, etc.). Traditional plans and PPO plans may also cover some preventive visits, but not to the degree that HMO plans are willing to provide.

Point of Service (POS) Plan
With a POS plan you get characteristics of both a PPO and an HMO. You may choose to see your "primary care physician." If you do see your primary care physician, the expense will be covered like an HMO plan. However, you may also choose to see any other doctor of your choosing. If the doctor you choose to see is "in-network," but not your primary care physician, the expenses will be covered similarly to that of an "in-network" PPO. Therefore, you may only be required to pay 20 percent of the covered expenses. However, if the doctor is "out-of-network," you may still visit the doctor, but may be required to pay 40 percent of the covered expenses.

As you can see, generally with insurance there are specific things not covered by anyone (such as cosmetic surgery) and most require co-payments for basic visits, and 20 percent of cost for other medical attention.

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Employee Health and Fitness

Covered Expenses