Health Insurance Explained: Everything You Need to Know to Make the Most of Your Plan

November 11, 2019

How well do you understand your health insurance policy? If you’re like the majority of Americans, you could probably use some pointers. In a study by United Health Care, a meager 9% of Americans demonstrated a “basic understanding” of the core four in health insurance policy terminology: health plan premium, health plan deductible, out-of-pocket maximum, and co-insurance, let alone the plan types (think PPO, HMO, etc.)

In a study by United Health Care, a meager 9% of Americans demonstrated a basic understanding” of the core four in health insurance policy terminology.

Understanding the details of your unique health care policy can save you time, money and headaches, and help you maximize your health care benefits. Think of this as your idiot’s guide to mastering the basics of your health insurance policy. Let’s start with the basics.  

Pro Tip: Always read your plan literature thoroughly. Coverage varies widely across plans, so it’s in your best interest to know the nitty-gritty. We know it might seem useless, but spending 10 minutes reading through your health plan information can save you lots of time, money, and frustration down the line.

Claim: A way for you to get your hard-earned dollars back! Claims are formal requests for reimbursement for services for which you've paid out-of-pocket. For instance, if you visit an out-of-network dermatologist, you might need to pay upfront and submit a claim to your insurance company for reimbursement. Most states mandate that providers pay back your claims within 30-45 days max. 

Co-payment (co-pay): "That'll be $25 for your visit today." Sound familiar? Your co-pay is the fixed amount of money you pay each time you see a practitioner, specialist or fill a prescription. According to recent data from the State Health Access Data Assistance Center, the average copay hovers around $26.50 for a general practitioner and $41.97 for a specialist.

Deductible: Amount you'll pay out-of-pocket before your insurance company starts covering costs. If your deductible is $2000, you’ll need to pay outright for services until you reach that amount. Check with your insurance company to determine exactly what’s counts towards your deductible.

Co-insurance: The percentage that you pay for a doctor’s visit or medical service. The remainder is paid by your health insurance plan, (after your deductible has been met.) If you have a 30% coinsurance, you’ll pick up 30% of the tab, and your health insurance will cover 70%.

Out-of-pocket maximum: The maximum you have to pay for any covered medical care in a plan year. If your out-of-pocket maximum is $3000, and you’ve already spent $3000 on co-pays, medical tests, etc., your health plan will cover 100% of any covered medical costs that exceed that $3000. Most plans have a separate out-of-pocket maximum for in-network providers and out-of-network providers.

Premium: The bill you pay monthly to your insurance company. The average premium for an individual in the U.S. hovers around $320-- and that's just for one person! Premiums can be influenced by the following factors: age, geographic location, individual-only or family enrollment plans, tobacco use.


In-Network Provider: They've got the hookup. Your insurance company has an arrangement with in-network providers. Hence why you usually pay less for each visit. 


Out-of-Network Provider: Since your insurance company doesn’t have a contract with this provider, you'll most likely pay more to see them than you would an in-network provider. Be sure to read the fine print of your out-of-network benefits, since some health insurance plans cover these services more generously than others.

Now that you’ve got the basics down, let’s dive into the specifics of your health insurance policy. PPOs, HMOs, and EPOs, oh my! What do these mystical three-letter acronyms for insurance plan types actually mean, you might ask? We’ll help you get an idea of the key differences between the most common health plans.

Preferred Provider Organization (PPO)

This plan gives you options. You're free to visit in-network doctors and specialists as you need. You can also see out-of-network providers, though you'll likely pay a bit more to see them. No referrals needed here! You’ll need to check with your individual plan in order to find out your out-of-network benefit details.

Health Maintenance Organization (HMO)

With these plans, you're bound by in-network providers if you want to be covered, and you'll need a referral from your primary care provider to see a specialist. A referral means that all specialist appointments must be ordered by your main provider, a primary care doctor or internist. HMOs typically don't pay any out-of-network costs but have lower deductibles and premiums than PPOs. 

Exclusive Provider Organization (EPO)

Similar to HMOs, these types of plans do not cover any out-of-network costs. Most EPOs do, however, allow you to visit specialists without a referral. 

Point of Service (POS)

Think of this as a mix between an HMO & PPO. These plans often require referrals for specialists, but give you more liberty to choose providers than an HMO. If you go out of network, you’ll likely have to pay most of the cost unless your primary care doctor has referred you to that provider.

For more information on health insurance plans, check out this PDF from the Department of Health & Human Services. Since every plan is different, we recommend checking with your insurance company for clarification of any questions or issues you may have.

If you’re looking for a doctor that’s covered under your health insurance, search through the practitioners that your community loves today. Short on time? We hear you. When you use the Voro concierge to book appointments, we'll find a provider that fits all of your needs and your insurance plan.

Lily Dulberg

Lily is a Copywriter and Data Analyst. She works with startups, nonprofits and businesses across the board to ignite engagement and develop captivating campaigns. She works closely with the Voro team on social media and newsletter communications to keep the Voro community up to date on the latest in health and wellness. Lily is based in Brooklyn, NY.

Related Posts

Stay in Touch

Thank you! Your submission has been received!

Oops! Something went wrong while submitting the form