Understanding Health Insurance Coverage
Confused about health insurance? You’re not alone. The good news is that a wide range of health insurance options or government programs are available. Now, with the advent of Covered California, nearly everyone has options for affordable coverage.
Your choice of health insurance is influenced by a number of factors, including whether or not you and your family:
- Are covered via government programs like Medicare and MediCal
- Receive health insurance benefits through an employer
- Are self-employed and must purchase insurance on your own
- Prefer higher deductibles over lower monthly premiums or vice versa
- Require regular treatment for chronic conditions
Types of Commercial Coverage
- HMO (Health Maintenance Organization): An HMO covers most of your health care needs, including checkups, immunizations and hospitalization, for a small co-payment, typically between $5 and $40 for physician services. There are no claim forms with an HMO; however, you can only go to doctors and hospitals affiliated with your plan, unless you are experiencing a medical emergency. A list of affiliated physicians and hospitals is provided by the HMO.
- EPO (Exclusive Provider Organization): An EPO typically functions the same way as an HMO, but the network may be more exclusive.
- PPO (Preferred Provider Organization): PPOs cover most of your health care needs if you choose from the list of preferred providers. You can choose to see a provider who is not on the preferred list;, however, you will be responsible for a greater portion of the bill. Typically PPOs have deductibles.
- POS (Point of Service): A POS plan offers you two choices each time you use health care services. One choice is to use the plan as an HMO in which case you are responsible for your standard co-payment; you must choose your physician from a list of participating physicians; and you must obtain authorizations for certain services and referrals to specialists. Your other choice is to use your health plan like a PPO or indemnity plan by choosing care from either a participating or non-participating provider, without coordinating care through your primary care physician or health plan. In this choice, you are generally responsible for higher out-of-pocket costs.
Legal residents of California who do not have health insurance through their job or from another government program will be able to buy insurance through the state’s new “exchange” called Covered California. All health plans purchased through Covered California must cover essential health benefits, including doctor visits, hospital stays, emergency care, maternity care, children’s care, prescriptions, medical tests and mental health care. They also must cover preventive care services, such as mammograms and colonoscopies. If you buy coverage through Covered California, you may qualify for federal tax credits or subsidies. Tax credits are available to people who make up to 400 percent of the federal poverty level.
California’s medical assistance program currently helps millions low-income families, seniors, people with disabilities and others in need. Eligibility is based on income and, under the new Affordable Care Act, Medi-Cal plans have expanded to include people with an annual income of less than 138 percent of the federal poverty level (in 2013 that would mean an individual who earned less than $15,856). In addition, the new MediCal expansions now cover eligible single adults without children, giving new options to people like college students and single men.
California Dept of Health Services - Medi-cal expansion
Medicare is the federal government insurance program for adults age 65 and older, those under 65 with certain disabilities and people with end-stage renal disease. Like Medi-Cal, the Affordable Care Act has expanded Medicare’s reach to include preventive care and prescriptions. If you are covered by Medicare, you do not have to participate in Covered California.