Health Insurance Basics

 


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Common Health Insurance Choices

The two most common types of health plans are HMOs (health maintenance organizations) and PPOs (participating provider organizations). Knowing how each type works will help you select the rightplan for you and your family.

HMOs and PPOs use select groups of doctors, hospitals and other health care professionals called provider networks. Some provider networks have fewer doctors and hospitals than others. Plans with smaller networks may have lower monthly premiums than plans with larger networks.

HMO

An HMO often has lower monthly premiums and out-of-pocket costs, like copayments and deductibles. HMOs only cover health care services given by the doctors and hospitals in the plan’s provider network.

Things to Know About HMOs

  • Your primary care physician (PCP) directs all of your health care.
  • Your PCP must refer you to a specialist.
  • You must see doctors, specialists and hospitals in your provider network to avoid paying out-of-network costs.
  • In an emergency — when your injury or illness is serious or life-threatening you can go to the nearest emergency room. No referral is needed.

PPO

PPOs give you the most flexibility, in most cases, but often have higher monthly premiums and out-of-pocket costs, like deductibles and coinsurance, than other plans. Some lower-cost PPOs have smaller provider networks than other more costly PPOs and some HMOs.

Things to Know About PPOs

  • You don't need a primary care physician (PCP).
  • You don't need a referral to see a specialist.
  • You can get care from doctors, hospitals and specialists in network or out of network. But keep in mind, you'll pay more for out-of-network providers.
  • You may need pre-authorization (pre-notification) from BCBSTX before you get certain tests or services.
  • In an emergency — when your injury or illness is serious or life-threatening — you can go to the nearest emergency room or other similar facility, even when traveling out-of-state or abroad. You don’t need a referral.

CDHP and the HSA1 Option

Consumer Directed Health Plans (CDHPs) often involves pairing a high deductible PPO plan with a tax-advantaged account, such as a Health Savings Account (HSA). An HSA is a savings account that you can use to cover a wide range of qualified medical costs.

Things to Know About CDHPs

  • You must have an HSA-qualified, high deductible health plan to open an HSA account.
  • CDHP premiums are often lower than other types of insurance coverage.
  • You don't have to choose a primary care physician (PCP) if your plan uses a PPO network.
  • You can get care from doctors, hospitals and specialists inside or outside of your plan's network. Keep in mind you'll pay more for out-of-network providers

1 Health Savings Accounts (HSA) have tax and legal ramifications. Blue Cross and Blue Shield of Texas does not provide legal or tax advice, and nothing herein should be construed as legal or tax advice. These materials, and any tax-related statements in them, are not intended or written to be used, and cannot be used or relied on, for the purpose of avoiding tax penalties. Tax-related statements, if any, may have been written in connection with the promotion or marketing of the transaction(s) or matter(s) addressed by these materials. You should seek advice based on your particular circumstances from an independent tax advisor regarding the tax consequences of specific health insurance plans or products.

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