Life with MS

Top Health Insurance Terms You Need to Know

By Matt Cavallo

When you live with multiple sclerosis, it is vital that you understand your health insurance plan in order to manage your disease. Whether you receive insurance through your employer, the healthcare marketplace, or a government insurance, like Medicare, Medicaid, or Tricare, there are certain terms that you must become familiar with to ensure that you follow the rules of your plan to achieve the best possible outcomes. This article will explain and simplify common health insurance terms, acronyms, and abbreviations that every person living with MS should know.

Insurance Types

• Health Maintenance Organization (HMO) – An HMO delivers all health services through a network of healthcare providers and facilities who have negotiated fees in advance. A primary care doctor (PCP) is required to manage your care and a referral is often required to see a specialist, such as seeing your neurologist for MS. An HMO typically has lower out-of-pocket costs.
• Preferred Provider Organization (PPO) – The main difference between a PPO and an HMO is that a PPO doesn’t require your doctor to be in the network. You don’t have to get a referral from a primary care doctor to see a specialist. While granting more flexibility, upfront and out-of-pocket costs are typically higher.
• Point-of-Service (POS) – Is a combination of an HMO and a PPO where there is a limited choice of providers in exchange for lower medical costs but you can see out-of-network providers for higher cost to you.
• High Deductible Health Plan – These plans charge a higher deductible in exchange for a lower monthly premium. This plan is ideal for people who do not utilize a lot of medical visits or treatments in a calendar year, but want coverage for catastrophes.
 
Insurance Payments
• Premium – Is the amount that you pay to the insurance company every month. If you miss a payment or let your premium lapse, then your coverage can be terminated immediately.
• Deductible – Is the amount you must pay for covered healthcare services before your insurance plan starts to pay. For example, a plan with a $1,500 deductible means that you pay the first $1,500 before the plan will pay for covered health services. After the deductible is met, there is typically a copay or coinsurance that applies. Typically, the higher the deductible, the lower the monthly premium. It is important to check your plan for the terms of your deductible as there may be certain services – such as a yearly physical or chronic disease management – that may be covered by the plan prior to the deductible being met. Prescription costs may have separate deductibles.
• Coinsurance – Is a percentage of costs that you pay for a covered health service once you have met your deductible. For example, let’s say you have a plan with 20 percent coinsurance and you have met your deductible and are ordered to get an MRI. If the MRI costs $1,000, you would pay $200 and the insurance company is responsible for the remaining $800. If you haven’t met the deductible, you would be responsible for the full cost of the MRI or $1,000.
• Copayment – Is a fixed amount that you pay for a covered healthcare service after you've paid your deductible. Copayments can vary per health service and the amounts are typically listed on your insurance card. For example, you may have a $20 copay for doctor’s visits, $35 copay for a specialist and $100 copay for services like MRIs. If you haven’t met your deductible, you maybe responsible for the full cost.
• Explanation of Benefits (EOB) – Is a statement sent by a health insurance company to the covered individuals explaining what covered health services were paid on the behalf of the insured. It is important to note that the EOB is a statement and not a bill.

Physician Types

• Primary Care Physician (PCP) - Is a medical doctor (MD) or doctor of osteopathic medicine (DO) who directly provides or coordinates a range of healthcare services for a patient. It is critical to note that your MS treating neurologist is not your PCP and that your PCP may have to write a referral to your neurologist to coordinate MS services.
• Specialist – A specialist focuses on a specific area of medicine or a group of patients to diagnose, manage, prevent, or treat certain types of symptoms and conditions-like a neurologist to manage your MS. If you have an HMO plan, your MS specialist will need a referral.

Administrative

• Referral – Is a written order from your primary care doctor for you to see a specialist or get certain medical services like an MRI. Many insurance companies won’t pay for health services without receiving a referral first.
• Prior Authorization – Is approval from a health plan that may be required before a medical service or a prescription will be covered by your plan. Prior authorization, however, does not guarantee payment from a health insurance plan. When you provide your referral to the specialist, they will seek prior authorization from your insurer prior to your appointment.
• Appeal – If your health plan denies a referral, prescription, or other health service, you have the right to request that the health plan review that decision. The appeals process may be started by you or your provider with your consent. The terms of your policy will outline the appeal process.
• Grievance – Is a complaint that you communicate to your health insurer or plan. Grievances can be filed after all appeals have been exhausted. Your plan will detail the steps to follow to file a grievance.
• Benefits – Refers to all healthcare services that are included in your plan.
• Excluded Services – Are healthcare services that your health insurance or plan doesn’t pay for or cover. For example, chiropractic services are excluded from some plans.
• Pre-Existing Condition – Is a health problem, such as MS, that you were diagnosed with prior to the start date of health insurance coverage. Insurance companies can't refuse to cover treatment for your pre-existing condition or charge you more. It is important to note that there can be a pre-existing exclusionary period when switching insurances. When you switch policies, it is important to get a letter of creditable coverage from your previous insurance and present it to your new insurance to establish that your condition has been covered in the past. This will help to avoid any gaps in coverages or exclusions that may apply.
• Formulary – Is a list of prescription drugs that are covered by a prescription drug plan or another insurance plan offering prescription drug benefits. As a person living with MS, it is critical to find your MS treatment on the formulary before selecting a plan option.
• Durable Medical Equipment (DME) – Refers to equipment and supplies ordered by a healthcare provider for everyday or extended use. Coverage for DME may include, but is not limited to, wheelchairs, crutches, braces and scooters.
• Medically Necessary – Refers to healthcare services or supplies needed to diagnose or treat an illness, injury, condition, disease or its symptoms and that meet accepted standards of medicine.
• HIPAA – Is an acronym that stands for the Health Insurance Portability and Accountability Act, a U.S. law designed to provide privacy standards to protect patients’ medical records and other health information provided to health plans, doctors, hospitals, and other healthcare providers.