Insurance Plan Types
Medical Cost Advocate accepts any medical bill from any insured or uninsured consumer. The following are major insurance plan and reimbursement plan types. All of these have charges that can be negotiated with our services.
Preferred Provider Organization Plans (PPO)
PPO plans offer a great deal of freedom to users and have separate treatment for in network and out-of-network providers. These plans often have higher deductibles and are typically used by individuals who want choice and are willing to pay to go out-of-network. Members of these plans generally incur significant out-of-pocket fees and are the strong beneficiaries of Medical Cost Advocate services. PPOs are the largest plan category. (49% of plans)
Point of Service Plans (POS)
POS plans are administered through a primary care physician and require referrals. These plans also allow the use of out-of-network providers and are subject to co-insurance and higher deductibles that Medical Cost Advocate can negotiate. (18% of plans)
Health Maintenance Organizations (HMO)
HMO plans are run such that insured consumers must choose in network doctors. As long as in network doctors are used there is typically only a small co-payment for services. When consumers go out of HMO networks for specialists, the procedures are typically not covered and thus result in direct bills to the consumer that Medical Cost Advocate can negotiate. (25% of plans)
Conventional Plans (Indemnity)
Indemnity plans do not offer discounted in network rates and typically have high deductibles that must be met before insurance pays. (4% of plans)
Consumer Direct Health Plans (CDHP), Health Savings Accounts (HSA) and High Deductible Health Plans (HDHP)
Medical Cost Advocate is ideally suited for Consumer Direct Health Plans. As consumers assume greater responsibility for their care, there are much larger out-of-pocket costs and consequently there is more opportunity for negotiation and cost reduction. These plans made up 5% of total plans in 2006 and are expected to grow to 24% of plans by 2010. These accounts are being pushed aggressively by insurance companies today.
Health Savings Accounts (HSA) were launched in January of 2004. HSA plans include a High Deductible Health Plan (HDHP) coupled with a tax advantaged HSA account. HSA plans allow individuals and/or employers to set aside pre-tax dollars in an incentive account similar to a 401K which can be used for healthcare expense reimbursement. Earnings in such an account grow tax free and distributions for qualifying healthcare purchases are tax free. These plans contain the following benefits:
- They are designed to modify consumer behavior by incenting consumers to self control healthcare costs and benefit from the savings achieved
- They enable greater consumer choice in healthcare options
- Employer contributions are excluded from employment and income taxes
- Individual contributions are excluded from income tax – Earnings and qualified withdrawals are also not taxable
- Members can invest unused benefits similar to a 401K format
The deductibles for these plans are relatively high, resulting in large out-of-pocket expenditures. The deductibles are typically $1,000-$3,000/individual and $2,100-$6,000/ family. The average deductible is about $3,500. The maximum out-of-pocket amounts are typically $5,250/ individual and $10,500/family.
Flexible Spending Accounts (FSA)
FSA accounts enable consumers to use pre-tax money for reimbursement of qualified medical expenses. Consumers elect the amount to contribute to such plans at the beginning of the year and fund the accounts through payroll deductions. Unused account balances are forfeited after year end.
Health Reimbursement Arrangements (HRA)
HRA accounts are similar to FSAs, however, they are funded by employers and enable employees to get reimbursed for qualifying expenses up to a pre-established limit.
Medical Cost Advocate’s services integrate well with Flexible Spending Accounts (FSA) and Health Reimbursement Accounts (HRA). Simply send a copy of your Medical Cost Advocate savings summary report, which shows the total amount paid, for reimbursement.