Understanding Health Insurance

It all starts with your health insurance plan.

  • When you purchase health insurance, you are entering into a contract with the health insurance company; you buy the plan and the company agrees to pay for some portion of your medical costs.
  • There are a few ways your health insurance plan will share costs with you: deductibles, co-pays, co-insurance. It is important that you understand how these will apply with various healthcare services you receive.
  • There are lots of health plans to choose from and they offer a wide variety of coverage options. Generally, the less expensive plans have more restrictions and provide less coverage. You may pay less up front in premiums, but may be required to pay a larger portion of your medical costs. Keep this in mind as you determine the plan will best meet your healthcare and financial needs.
  • Your health plan sets the rules: what is covered, how much coverage you have for each service and supply, which providers are "in-network" vs. "out-of-network," any special rules that restrict access to coverage, and generally what your portion of the bill will be for each service.
  • When a healthcare provider is out-of-network with a health plan it means they do not have an agreement with that plan. Some health insurance plans provide only limited or NO coverage when you access care from an out-of-network provider. This means the bill you receive from an out-of-network healthcare provider could be much higher than if you received that same service from an in-network provider.
  • Refer to Common Definitions below for information on health insurance terms.

Information you need to understand from your health insurance plan BEFORE you access healthcare at ANY provider:

Before you receive services from any healthcare provider, see if that provider is in-network and how your plan will cover costs for the type of service you will be receiving. You can do this in a few different ways:

  • Call your health insurance plan. You can typically find their number on the back of your insurance card.
  • Use your health plan’s website. Many offer interactive web tools to help you understand your coverage.
  • Use your health plan’s mobile app. Many offer mobile apps to help you understand your coverage.

Check your plan against what type of service you will be receiving (e.g., physical therapy, immunizations, primary care visit, psychiatry care, etc.) and where you would like to be seen.

Try to determine the answers to these types of questions:

  • Is this healthcare provider in-network? 
    • If not, how can I find an in-network provider?
    • If I choose to see this provider anyway (out-of-network), what will my cost be?
  • Does my plan provide coverage for this service?
    • Are there limitations or exclusions to my coverage for this service?
    • Does my plan require a Prior Authorization or Referral? 
    • Does my plan limit the number of visits that I am entitled to? 
    • If I am given supplies as part of my care, will they be covered?
  • Will I need to pay a deductible? 
    • If so, how much is my deductible? 
    • When does my deductible reset each year? 
    • Do I have a different deductible for in-network and out-of-network providers?
  • Will I need to pay a co-payment or co-insurance? If so, how much?
  • Is my prescription plan different than my medical plan?
  • Does my plan include dental coverage? 

Note: If you will be receiving lab work, make sure you check with your health insurance plan to see how they will process bills from our partner labs (Quest Diagnostics and McKenzie-Willamette Hospital).

Understanding the Difference Between EOBs and Bills

Medical bills are sent from healthcare providers. They may include very detailed information about your specific diagnosis and treatment/testing. Anyone viewing medical bills could have a very clear sense of your diagnosis and treatment plan.

Explanation of Benefits (EOBs) are sent by your health insurance plan. They have much less detail. EOBs do show where you were seen and a general descriptor of services (e.g. "physical therapy" or "lab work").

You have control over where bills and EOBs are sent and should proactively make sure they are going to the address you want them to. To control where bills are sent, make sure the address we have on file is accurate. To control where your EOBs are sent, contact your health insurance plan.

Common Definitions

Co-insurance: The percentage of each bill you must pay out-of-pocket.

Co-payment: The fixed amount of each bill you must pay out-of-pocket. The co-pay is usually due at the time of service.

Coordination of Benefits (COB): When two or more insurance plans cover the same person, Coordination of Benefits is used to determine which plan pays first. 

Covered Benefits: The health care items or services covered under a health insurance plan. Covered benefits and excluded services are defined in the health insurance plan's coverage documents. 

Deductible: The amount you pay for covered health care services before your insurance plan starts to pay. With a $300 deductible, for example, you pay the first $300 of covered services yourself. The deductible may not apply to all services. Typically, health plans will have a separate deductible for in-network vs. out-of-network providers.

Durable Medical Equipment: Equipment and supplies ordered by a health care provider for everyday or extended use. Coverage for DME may include: medically-necessary splints, wheelchairs, crutches or blood testing strips for diabetics.

Health Maintenance Organization (HMO): A type of health insurance plan that usually limits coverage to care from doctors who work for or contract with the HMO. It generally won't cover out-of-network care except in an emergency. An HMO may require you to live or work in its service area to be eligible for coverage. HMOs often provide integrated care and focus on prevention and wellness.

Network: The facilities, providers and suppliers your health insurer or plan has contracted with to provide health care services. Networks change, so it’s important to check with your health plan to be sure your provider(s) are in-network at the time you receive care.

  • In-Network: Provider or facility has a contract with the insurance company and has negotiated a contracted or discounted rate with the insurance. You generally pay less when you receive care from an in-network provider.
  • Out-of-Network: The provider or facility does not have a contract with the insurance company. You generally pay more when you receive care from an out-of-network provider.

Non-Covered Benefits or Exclusions: Health care services that your health insurance or plan doesn’t pay for or cover.

  • Common exclusions: Travel vaccines and services, massage therapy, cosmetic procedures, non-medically necessary services or supplies, etc.

Medically Necessary: Health care services or supplies needed to diagnose or treat an illness, injury, condition, disease or its symptoms and that meet accepted standards of medicine.

Out-of-pocket maximum: The most you will pay for covered medical expenses during the plan year. Once the out-of-pocket limit has been met, the plan will pay 100% of covered charges for the rest of that plan year. This limit never includes your premium, balance-billed charges or health care your health insurance or plan does not cover. 

Preauthorization or Prior Authorization (PA): A decision by your health insurer or plan that a health care service, treatment plan, prescription drug or durable medical equipment is medically necessary. Sometimes called prior authorization, prior approval or precertification. Your health insurance or plan may require preauthorization for certain services before you receive them, except in an emergency. Preauthorization isn’t a promise your health insurance or plan will cover the cost. Note: Prior authorization is not required during medical emergencies.

Preferred Provider Organization (PPO): A type of health plan that contracts with medical providers, such as hospitals and doctors, to create a network of participating providers. You pay less if you use providers that belong to the plan’s network. You can use doctors, hospitals, and providers outside of the network for an additional cost.

Premium: The amount you pay for your health insurance coverage. When shopping for a plan, keep in mind that the plan with the lowest monthly premium may not be the best match for you. If you need much health care, a plan with a slightly higher premium but a lower deductible may save you a lot of money.

Referral: A written order from your primary care doctor for you to see a specialist or get certain medical services. In many Health Maintenance Organizations (HMOs), you need to get a referral before you can get medical care from anyone except your primary care doctor. If you don’t get a referral first, the plan may not pay for the services.

Subscriber: The name of the policy holder of the insurance plan. In a family plan, this is typically a parent.

For more definitions, refer to HealthCare.gov's Glossary. For information on Metal categories for health plans, refer to The Metal Categories on HealthCare.gov.