Understanding the Different Types of Insurance Plans and Residential Care

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By Marcus Call

HMO: Health Maintenance Organization

Refresher/Overview

  • Under an HMO, you must select a primary care physician (PCP), through whom all of your healthcare needs are coordinated.
  • In order to see a specialist, you will need to first see your PCP, who will then provide you with a referral.
  • HMOs only provide in-network coverage (a contractual agreement for discounted rates between health care providers and your insurance company), allowing for out-of-network (nonparticipants in an insurance plan) coverage in emergency situations.
  • Typically, as HMOs primarily deal with in-network providers, there are less claims (a request for payment based on the terms of the policy) involved.

How Does This Affect Residential Treatment?

  • First, your PCP will need to recommend residential treatment (a live-in health care facility, often referred to as RTC), they will then refer to you an appropriate RTC.
  • Options for RTCs may be limited though, depending on the availability within your network.

PPO: Preferred Provider Organization

Refresher/Overview

  • Under a PPO, you are not required to select a PCP, and are able to see a variety of doctors of your choosing; however, seeing a doctor in-network will save you money.
  • You do not need a referral in order to see a specialist, but deductibles are often higher.
  • While you have the freedom to select from out-of-network providers, this will incur higher fees and involves a separate deductible.
  • Sometimes, the effect of seeing out-of-network providers, you may be responsible for additional claim work.

How Does This Affect Residential Treatment?

  • Under a PPO, your insurance may not initially assist with the any fees involved with residential treatment until your deductible has been met.
  • Despite having access to out-of-network providers, depending on your plan, there may still be option-restrictions for RTCs.

EPO: Exclusive Provider Organization

  • EPOs are similar to HMOs; however, you do not need to select a PCP, and do not need a referral to see a specialist.
  • There is no out-of-network coverage under an EPO. You are restricted to providers within your EPO network.

How Does This Affect Residential Treatment?

  • You most likely will not be able to select an RTC out-of-network, but should be able to select one in-network without a referral.

HRA: Health Reimbursement Arrangement

  • HRAs are accounts set up by employers, which act separately from your health plan.
  • Your employer contributes funds to these accounts to cover or contribute to their employees’ medical expenses not covered by their health plan.

How Does This Affect Residential Treatment?

  • You would most likely have to file some type of separate claim with your employer, seeking reimbursement for RTC costs; and even if approved, the available funds made available would probably be limited.

      HSA: Health Savings Account

  • HSAs work in conjunction with your health plan, and allow for you to contribute money from your paycheck into a separate personal account to use toward medical expenditures later.
  • While you can choose when and how much to withdraw from your HSA, if you choose to use this money for non-medical expenses before the age of 65 you will have to pay a penalty when filing your annual income taxes.

How Does This Affect Residential Treatment?

  • If your health insurance won’t cover RTC costs, depending on whether or not you want to allocate those resources for these costs, you can elect to withdraw funds

from your HSA.

FSA: Flexible Spending Account

  • FSAs are similar to HSAs, except your employer owns the account.
  • You are still responsible for contributing funds to the account, and like an HRA, are still able to decide when to withdraw money from the account.

How Does This Affect Residential Treatment?

  • FSAs can often be used in conjunction with PPOs, so you may be able to cover

some costs for out-of-network RTCs with these funds.

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