Healthcare lingo is complicated. A simple discussion about managed care (one of my favorite pick-up topics) can quickly sound like an eighth-grader’s text messaging free-for-all. Negotiating this slew of acronyms can be infuriating, but not knowing
how your plan works can cause serious confusion and cost you a significant amount of money.
There was a time when if you had a problem, you went to a doctor and your mom paid the bill while you fired up the old-school Pacman machine in the lobby. Now you have to select a PCP from a list provided by an HMO. Confused? Me too. But now that you’re on your own and potentially off your parents' plans, you need to figure out one that best fits your needs. Read on for clarification and advice in navigating the world of managed care.
The Big Picture
All health insurance works basically as follows: In exchange for a monthly premium, you can visit doctors or specialists when issues arise, and your insurance companies will pay for what they think it should cost. Most of the time, there isn’t much of a disparity between the doctor’s billing and what the insurance company considers appropriate, but keep in mind that they basically reserve the right to pay (or not as the case may be) for whatever part of the bill they want. Either way, if you get hit by a car, fracture fifty bones, and need facial reconstructive surgery, those pesky thousands in premiums just saved you somewhere around a million bucks.To slightly complicate matters, most insurance plans require a deductible, a co-pay, or both. A deductible is the predetermined amount that you have to spend on medical services in a given year before the insurance company starts ponying up. Sensibly, the lower the deductible, the higher the price of the plan, because your insurance is ostensibly agreeing pick up a larger portion of the bill.
So how do you choose? Think about it this way: if you are a tri-sport athlete with no history of health problems whatsoever and only plan to see the doctor for a yearly checkup or if you get mangled in the aforementioned car crash, you will probably go for a cheaper plan with a higher deductible (say $15,000) and suck up the cost of the visit. However, if you are a tri-sport athlete with a history of knee, ankle, foot, and heart problems and a penchant for hypochondria, you will probably want to pay a higher monthly premium for a low deductible so you can visit doctors free of charge to your heart's content.
Well…almost free. And that’s where the co-pay comes in. Basically, health insurance companies hate giving away anything for free and make you pay a small amount (between $5-$20) for seeing a doctor after you’ve already gone over your deductible. Not so complicated, right?
Oh yeah, one more thing. Some insurance companies also cap the amount of out-of-pocket expenses you will have to pay ("yay," say hypochondriacs) but also put a maximum on the amount they will cover ("boo," says the poor bastard in a car crash). And that’s where the similarities end and the acronyms begin. Nowadays, almost every company or individual insurer has to choose between a number of different plans called Managed Care, each of which has its own acronym that doesn’t really correspond in any way to what the plan offers, just for extra confusion’s sake. Fortunately, I’ve provided a handy guide to acronymic success, replete with dating analogies for extra easy acronym surfing.
