Health Insurance Articles
Is There A Difference Between A Health Plan And Health Insurance
2010-01-19
Sometimes the words "health plan" and "health insurance" are used interchangeably, but there is a marked difference between the two terms. It is vital to understand how a person's health insurance policy operates and what will be covered when hospital stays or other medical issues occur. This is especially true when an employer provided medical insurance is at stake. In most cases, the word "health plan" is used to refer to HMOs or PPOs, while "health insurance policy" is a more blanket term that can refer to those special policy types or any other type of health insurance coverage.
It's helpful to understand how an HMO or a PPO operate in order to better understand what type of policy you have and how your policy will work when you require medical assistance. An HMO is typically provided by an employer, and it's a type of health insurance that requires a person to use certain hospitals and physicians. Coverage levels vary greatly, and some procedures may not be covered by an HMO. PPOs are similar yet different: while certain physicians and hospitals might be recommended by the insurance company, they're not required. Discounts are usually given on the copay and deductible of the patient if the patient chooses one of the physicians named in the PPO agreement, or physicians recommended by PPO websites or customer service. Again, the amount of coverage, the levels of the co-pays, and other features are determined by the individual plans.
In contrast, the term "health insurance" applies to both of these types of insurance as well as POS insurance, in which a patient can choose his or her own physician, hospital, etc. There is no hard and fast rule when it comes to declaring a difference between health insurance and health plans, but the general usage is that a health plan is more specific and is almost always provided by an employer rather than purchased privately by an individual. A health plan is not necessarily better or worse than a health insurance policy.
If you have questions about how your employer-provided health plan operates, be sure to clear up any confusion before your next visit to a doctor's office. Call your health insurance agent or speak to the HR department of your company in order to gain clarification on any of your questions. Be sure to find out whether you're expected to use certain physicians and understand how your policy operates. Taking a little bit of time to learn about your policy pays off big in the long term, and can provide you with great peace of mind.
