Demystifying Health Insurance Terminology for California Residents 

The healthcare industry can be utterly confusing to those who aren’t in the field but need to know how to use their California health insurance benefits. Consider such alphabet terms as HMO, EPO, PPO, and POS. 

It’s time to get some important health insurance terms explained. 

Cracking the Code of Health Insurance Insider Language 

Every industry has its own buzzwords. These are the shortcuts in language that the insiders clearly understand. They literally “speak the language.” But what about those who aren’t in the industry but have a critical need to interact with it? 

Consider, for instance, Californians who need to use their healthcare insurance benefits to obtain medical care for themselves and their loved ones. How can you properly proceed if your insurance provider or healthcare professionals seem to be speaking a language of their own? Keep reading for some tips and explanations to help you navigate these systems. 

The Building Blocks of Your Health Plan 

Start with the basics. The following are some of the terms you’ll most commonly hear about your health insurance coverage. Once you have an understanding of these common buzzwords, things start to become a bit clearer. 

Premiums: Your Access Ticket to Coverage 

This one’s easy once you get a definition. Your premium is simply the amount you pay to keep and use your healthcare benefits (or any insurance, for that matter). Your premium is the bill you receive and must pay periodically, the frequency of which depends on your insurer’s payment terms. 

As long as you continue to pay your premiums, you’ll receive health insurance coverage according to the terms established. 

Deductibles: The First Step in Your Coverage 

What is a deductible? 

Every health insurance agent who’s been around for a while has been asked that question repeatedly. If they’re any good, they’re happy to provide an answer that cuts through the confusion. 

A deductible is simply the amount of money you agree to pay for a covered medical bill before your insurer pays the rest. For instance, if you have a $1,000 deductible, you’ll pay that much for a $10,000 covered medical treatment before your insurance company pays the remaining amount up to your policy limits. 

The size of your deductible will affect the amount of your premium. That’s because the more you agree to pay out of pocket, the less your insurer must pay. So, when you accept a higher deductible, you’ll pay less for premiums than if you select a low deductible. 

If you’re in good health and don’t expect to have to pay significant medical bills in the near term, it might make sense to accept a higher deductible and pay less monthly. But keep in mind that no one can predict the future. Even those who are young and in good health (or think they are) can require unanticipated and expensive care. So, never set your deductible at a level you can’t afford to pay out of pocket in case you do end up with a medical issue. 

Health Insurance Dependent vs. Beneficiary 

What is the difference between a dependent and a beneficiary? Both terms get tossed around by policy industry insiders to describe those who can use the health insurance plan, but there’s a difference. 

Dependents are those who aren’t the policyholder — the person who actually bought the coverage — but can take advantage of it. If you buy health insurance for yourself and your family, you’re the policyholder, and your spouse or partner and your kids are the dependents. They can seek coverage with that plan if and when they need it. 

When they do take advantage of those benefits by seeing a doctor or specialist or going to an emergency room, they become beneficiaries. 

So the only real difference between the terms is that dependents can take advantage of a family health plan, and beneficiaries do take advantage by seeking covered medical care. 

Understanding Plan Types 

Where and how do you go to get that coverage? It depends on what type of plan or options your insurance policy offers. 

Here’s where that alphabet soup of health insurance terminology mentioned earlier gets unraveled. Terms such as HMO, PPO, EPO, and POS stand for varying healthcare coverage models that determine how the care is delivered and what it costs. 

These terms are important to know because these coverage models determine what you pay for insurance and out-of-pocket costs. If you use the wrong care delivery system — for instance, using a PPO when you have only HMO coverage — your medical bill might not be fully covered. 

That’s why it’s critical that you understand what these terms mean and the differences between them. 

HMO: Health Maintenance Organization 

An HMO plan is the most restrictive form of coverage. It means that you must select a primary provider who’s part of the HMO network your plan offers. That provider will then refer you to specialists who are also part of the HMO network if such services are recommended. 

If you go out-of-network, such as by seeing your long-term doctor who’s not part of the HMO, your insurance will not pay. However, you won’t have to worry if you or a family member needs emergency care at the nearest facility. In the case of emergencies, your insurer will pay the covered claim regardless of where the services are rendered or what type of plan your insurance includes. 

EPO: Exclusive Provider Organization 

This is very much like an HMO network, except that the network is larger, and you probably have a greater selection of primary care physicians from which to choose. The rules vary on whether or not your primary care physician refers you to specialists. Some EPOs might require such referrals, and others might not. 

POS: Point of Service 

This plan type is similar to an HMO, in that you’ll have a network of primary care physicians who will issue referrals for you to see in-network specialists. The difference is that policyholders can go out of the POS network for covered medical services. The catch is that you’ll pay more out of pocket if you leave the network. The premium cost is generally slightly higher than HMO coverage. 

PPO: Preferred Provider Organization 

This is the healthcare plan that yields the most options for policyholders, but generally at the highest cost in premiums. However, your out-of-pocket expenses for seeing in-network primary care physicians and specialists are low. You can also go out of the network to see your own doctors and specialists, but the out-of-pocket cost is higher than if you stay in-network. 

Choosing Between Network and Out-of-Network Providers 

Each of the above plans has its own advantages and disadvantages. If you’re in good health and not very loyal to an out-of-network primary care physician, your best option might be an HMO or other plan that holds costs down as long as you stay in the network. 

If, however, you have a medical condition and are already seeing specialists who aren’t in the network, you might decide to go with a plan that gives you the freedom to go out of network at a cost that might be higher but is still affordable. 

California-Specific Health Insurance Terms 

Let’s say you’re currently unemployed, or your company doesn’t offer health insurance. Or you’re the owner of a small company and can’t afford coverage for your workers, their families, and your own. What do you do? 

As residents of the Golden State, you have options regardless of your ability to pay for health insurance. 

You and your loved ones are still covered if you’re California residents. 

Covered California: The State Health Insurance Marketplace Explained 

Thanks to a program known as Covered California, all of the state’s residents and their loved ones can access high-quality insurance plans at rates they can afford — sometimes as little as $10 a month, or even less. 

The monthly premiums for Covered California insurance plans are based on what you can afford to pay. The program started after the introduction of the Affordable Care Act (ACA), more commonly known as Obamacare, in 2010. As part of the ACA, states were encouraged to start their own programs in association with Obamacare. 

California became the first state to do so. Covered California comes with a full inventory of health insurance plans through such well-known brands as Blue Cross, Kaiser Permanente, Aetna, and UnitedHealthcare, among others. 

Enrollment is easy, affordable, and guaranteed as long as you and your family are California residents. Check out these frequently asked questions about the program. 

Then, to learn more, visit the Covered California website. 

Medi-Cal: The Ins and Outs of California’s Medicaid Program 

Medi-Cal is the state’s version of the Medicaid program, offering low-cost or no-cost healthcare coverage for California residents who qualify. While Covered California enrollees pay a premium based on their income, those on Medi-Cal typically pay nothing for their healthcare coverage. 

Which program is right for you and your family? The state will help you determine this when you go online to the Covered California website to enroll. You’ll be asked some basic questions related to your annual income and ability to pay for a health policy and be steered to the program that’s right for you. 

Looking for More Information About Applying for Covered California? Reach Out to Acceptance Insurance 

Have we helped you clear up at least some of the buzzword confusion? The topic of health insurance is complicated, so that’s why we’re here. At Acceptance Insurance, our independent health insurance agents can answer all your questions and help you apply for and obtain very affordable healthcare coverage through Covered California. 

Simply call Acceptance at (877) 405-7102. You can also go to our website and get a quick and easy cost quote for Covered California health insurance. Or chat with an expert by finding an Acceptance Insurance office near you. 

No matter where you live in the Golden State or your annual income, you can find help and support from a knowledgeable Acceptance Insurance agent.