Once you meet the deductible, most indemnity plans pay a percentage of what they consider the “usual and customary” charge for covered services. The insurer generally pays 80 percent of the usual and customary cost and you pay the other 20 percent, which is known as coinsurance. If the provider charges more than the usual and customary rates, you will have to pay both the coinsurance and the difference.
The plan will pay for the charges for medical tests and prescriptions as well as from doctors and hospitals. It may not pay for some preventive care, like checkups.
A PPO is a form of managed care closest to an indemnity plan. A PPO has arrangements with doctors, hospitals, and other providers of care who have agreed to accept lower fees from the insurer for their services. As a result, your cost sharing should be lower than if you go outside the network. In addition to the PPO doctors making referrals, plan members can refer themselves to other doctors, including ones outside the plan.
If you go to a doctor within the PPO network, you will pay a co-payment (a set amount you pay for certain services—say $15 for a doctor visit or $20 for a prescription). If you choose to go outside the network, you will have to meet the deductible and pay coinsurance (generally a percentage of the charges for the service provided). In addition, you may have to pay the difference between what the provider charges and what the plan will pay.
HMOs will give you a list of doctors from which to choose a primary care doctor. This doctor coordinates your care, which means that generally you must contact him or her to be referred to a specialist. HMOs generally require you to pay a co-payment when you visit doctors.
If the doctor makes a referral out of the network, the plan pays all or most of the bill. If you refer yourself to a provider outside the network and the service is covered by the plan, you will have to pay coinsurance.
You must be covered by a High Deductible Health Plan (HDHP) to be able to take advantage of HSAs. An HDHP generally costs less than what traditional health care coverage costs, so the money that you save on insurance can therefore be put into the Health Savings Account.