This presentation discusses different types of health insurance plans. It defines group insurance, which is obtained through an employer, and individual insurance, which is purchased independently. It also explains managed care plans like PPOs, HMOs, POSs, and EPOs. PPOs encourage using preferred providers by paying higher benefits, while HMOs require using a primary care physician for referrals. POS and EPO plans combine aspects of PPOs and HMOs. Indemnity plans do not require using preferred providers and pay the same benefits anywhere.

1. Andre L. Braun
Manager, Patient Access
Sinai Health Systems
April, 2015

2. Objectives
In this presentation, you will overview the different
types of health insurance
Group Insurance vs. Individual Insurance
Managed Care - PPO
Managed Care - HMO
Managed Care - Hybrids
 POS
 EPO
Indemnity

3. Health Insurance
Let’s define the term “health insurance.”
Health insurance is a policy which will provide
payment of benefits for covered expenses due to
sickness or injury.

4. Health Insurance - Group
For an individual who works for a company, he/she
may obtain health insurance through his/her
employer.
This health insurance is known as a:
“EGHP” “employer group health plan” or
 “group insurance plan” or
“group plan.”

5. Health Insurance - Individual
An individual who is self employed, or has his/her
own business, may purchase health insurance on their
own.
This is called “individual health insurance policy.”

6. Group and Individual Health Insurance
In both types of insurance, whether the insurance is
obtained through an employer or purchased
individually, the plan may cover one person or the
entire family.

7. Group and Individual Health Insurance
Definition Comparisons
In Group Insurance, the person who obtains the
coverage through his/her employer is called the
“subscriber.”
In Individual insurance, the person is called the
“insured.”

8. Group and Individual Health Insurance
Definition Comparisons
For both types of insurance, any other family
members are called the “dependents” on the plan.
Even a spouse on the plan or policy, is referred to as
the “dependent.”

9. Group and Individual Health Insurance
Definition Comparisons
It is imperative in your registration to identify the
subscriber / insured correctly.
If you include the name of the patient as the
subscriber, and the subscriber is actually his/her
spouse, the claim may be rejected by the insurance
company.

10. Group and Individual Health Insurance
Definition Comparisons
In group insurance, you would need to identify the
plan identification number (a.k.a. “plan ID” or “ID
number”) as well as the “group number.”
The ID number identifies the subscriber
The group number identifies the group or employer
Note that in individual insurance, there isn’t a group
number. The only number you would include is the
“policy number.”

11. Types of Health Insurance Plans
(Managed Care Plans)

12. PPO Plans – one type of health insurance
PPO…what does it stand for?
Preferred
Provider
Organization

13. PPO Plans
Picture a circle (think of an “O”)…
This is a circle (or “organization” or “network”) of
preferred healthcare providers (doctors, hospitals,
etc).

14. PPO Plans
When a patient is covered under a PPO plan, it is
encouraged that he/she goes to a “preferred
provider” or a provider in his/her “network” as
outlined by the insurance company.
This represents a doctor or hospital
Preferred
providers are
those within the
circle or
network…

15. PPO Plans
The incentive to stay within the network of providers
that the insurance plan gives to its covered members
is by the way the plan pays.
MSH
This represents
a non
contracted
provider
(outside the
circle)

16. PPO Plans
Some PPO plans pay at 90% of the eligible expenses
(or even higher) if a patient goes to a preferred
provider.
MSH
In this
example,
the
patient’s
PPO
insurance
plan will
provide
benefits at
90% by
going to a
preferred
provider.

17. PPO Plans
An additional incentive for a patient to going to a
provider in network is that the patient/guarantor will
not be responsible for any charges that are above the
contracted rate.
Next slide will illustrate the
above…

18. PPO Plans
Let’s look at an example. Let’s say that charges for
outpatient services are $1000, and the insurance
company determines that the charges are too high.
Because the provider is contracted with the insurance
company, the provider agrees to reduce the
charges.

19. PPO Plans
An illustration of how benefits are paid when provider is in
network:
$1000 charge
$800 reduced rate
Benefit calculation $800 x 90% = $720 benefit payment.
Patient is only responsible for $80
(the patient is not responsible for the difference between the
original charge and the reduced rate).
The above is an example of
when a patient goes to a
contracted/preferred provider
(or a provider “within the
circle”).

20. PPO Plans – not following terms
As a penalty for not going to a preferred provider,
some PPO plans pay at 60% of the eligible expenses
(or even lower).
MSH
In this
example,
Sinai
Health is
not a
preferred
provider,
benefits will
pay at 60%
of eligible
expenses.

21. PPO Plans – not following terms
In addition to a reduction in benefits, there isn’t an
agreement to take a lower rate.
MSH
In this
example,
Sinai
Health is
not a
preferred
provider,
benefits will
pay at 60%
of eligible
expenses.

22. PPO Plans – not following termsAn illustration of how benefits are paid when provider is out
of network:
$1000 charge
$800 reduced rate
Benefit calculation $800 x 60% = $480 benefit payment.
Patient is responsible for $520
(the patient is responsible for the difference between the
original charge and the reduced rate).
The above is an example of
when a patient goes to a
provider who is out of the
preferred provider network.

23. HMO Plans – one type of health insurance
HMO…what does it stand for?
Health
Maintenance
Organization

24. HMO Plans
Again, picture a circle (think of an “O”)…
This is a circle (or “organization” or “network”) of
healthcare providers (doctors, hospitals, etc).

25. HMO Plans
In the center of the circle, is a provider:
a doctor. He/she is known as a “primary care
physician” or “PCP.”
PCP

26. HMO Plans
The “PCP” maintains or is responsible for the
patient’s health.
Whenever the patient needs a doctor to review
his/her health needs, the patient is to visit the PCP
first before any other specialist.
PCP

27. HMO Plans
You could also say that the PCP is the gatekeeper for
the patient’s health.
If the health need is beyond the PCP’s scope, the PCP
may refer the patient to a specialist.
PCP
Specialist

28. HMO Plans
When the PCP refers the patient to a specialist, the
PCP provides the patient with an authorization or
referral to do so.
PCP
Specialist
Referral

29. HMO Plans
When the PCP requires the patient to have a hospital
service such as a lab or an x-ray, a referral must be
given as well.
PCP
X-ray @ MSH
Referral

30. HMO Plans
When a proper referral is provided, in a typical HMO
plan, most benefits are paid in full, possibly after a
small co-pay for some medical expenses (as outlined
in the plan).
PCP
X-ray @ MSH with referral =
100 % benefit
Referral

31. HMO Plans – Not following terms
Without the referral, and as penalty for not following the
terms of the plan, the HMO plan may not pay any
benefits on the service (in a PPO plan, benefits are
paid at a reduced rate when not following terms).
X-ray @ MSH
PCP
Referral = no benefit to
MSH

32. POS Plans – one type of health insurance
POS…what does it stand
for?
Point
Of
Service

33. POS Plans – Hybrid plan
A POS plan is a little like an HMO and a little like a
PPO. As outlined in the plan, a POS plan usually pays
at a percentage (PPO), and usually requires a referral
for some medical services (HMO).
PCP
Outpatient service @ MSH
Referral

34. POS Plans – Hybrid plan
A POS plan is a little like an HMO and a little like a
PPO. As outlined in the plan, a POS plan usually pays
at a percentage (PPO), and usually requires a referral
for some medical services (HMO).
PCP
Outpatient service @ MSH (paid @ 80%)
Referral

35. POS Plans – Not following terms
Without the referral, and as penalty for not following
the terms of the plan, the POS plan may pay benefits
at a reduced rate (just as in a PPO plan going outside
the network, benefits are paid at a reduced rate).
PCP
X-ray @ MSH
Referral = reduced benefit

36. EPO Plans – one type of health insurance
EPO…what does it stand for?
Exclusive
Provider
Organization

37. EPO Plans – Hybrid plan
An EPO plan is a little like an HMO and a little like a
PPO. As outlined in the plan, an EPO plan usually
pays at a percentage (PPO).
As with a PPO, a referral is not required.
X-ray @ MSH… Benefits paid at 80%.

38. EPO Plans – Hybrid plan
How it is like an HMO, is that when the terms of the
plan are not followed. Again, EPO stands for
Exclusive Provider Organization. If a patient goes to a
provider outside the network or circle…the EPO plan
will not pay any benefits on the service.
X-ray @ MSH
If MSH is outside the exclusive providers, the plan will not pay any benefit.
No benefits paid!

39. Indemnity Plans
An indemnity plan is a traditional type of health plan.
Unlike the aforementioned managed care plans, the
patient does not need to stay within a certain type of
preferred network.
With an indemnity plan, there
is not a preferred network (thus
the dotted circle).
Wherever the patient attends
for a medical service, the
benefits will be paid the same.

40. This presentation brought to you by:
Andre L. Braun
Manager, Patient Access
Sinai Health System
April, 2015