Health Insurance

Health insurance allows individuals, families and businesses to protect themselves against the risk of incurring sudden or significant medical costs related to their health. In addition to providing financial protection and peace of mind for policyholders, health insurance plans are increasingly providing programs and expertise to improve the quality and safety of patient care by promoting prevention and wellness, helping patients manage chronic conditions, partnering with medical providers, and driving innovations.

There are two ways in which people access private-market health insurance: 1) the individual insurance market, and 2) employer-sponsored coverage, which is comprised of the small group and large group markets. Each market has distinct characteristics and operates under different regulations.

There are a few different types of health insurance policies, including HMO (health maintenance organization), PPO (planned provider organization), EPO (exclusive provider organization), and indemnity plans.

Kaiser Permanente is the largest HMO in California, and the one most people are familiar with. In an HMO, an insured is assigned to a primary care physician who provides routine treatment. For anything beyond their scope of expertise, they refer you to a specialist within the HMO. In non-emergency situations, if one is treated outside of the HMO, there is no coverage and the patient is 100% responsible for their bill. In an emergency situation, one is covered if treated outside of the HMO, but the patient is expected to transfer back into the HMO network as soon as possible.

PPOs do not require that the insured choose a primary care physician, and he/she can go to any provider that is part of the PPO network. PPO insurance providers like to say that you are covered if you receive treatment outside of the network. Beware -- they won't pay more than what they would have paid an in-network provider, but the out-of-network provider can charge whatever their listed rate is, which is almost always a whole lot higher than the negotiated rates of the PPO network. Also, be sure that everybody that treats you is in your network. As an example, most people check to be sure their surgeon and/or hospital is in their network, but they don't think to check that the anesthesiologist is also in the network, and they're shocked when the anesthesia bill comes.

EPOs are a hybrid between HMOs and PPOs, in that one doesn't have to go through a primary care physician and can self-refer to any provider listed in the EPO network. However, if one goes outside the network, there's no coverage, just like an HMO.

Indemnity plans pay a set amount for services provided and usually do not have a network. They don't comply with Affordable Care Act regulations, so they're going extinct.