Health Common Questions

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1895 Youngfield St. #3
Golden, CO 80401
Tel: (303) 237-1220
Fax: (303) 235-8501

	1. What is health insurance?

	2. What is the difference between a HMO and a PPO?

	3. What is a deductible?

	4. What is the difference in a co-pay and co-insurance?

	5. Are co-payments counted as part of the annual deductible?

	1. What is health insurance?
Health insurance is a contract in which the insured and the insurer shares risk. The insured pays a premium to the insurer who pays a predetermined amount of money toward health care expenses.

2. What is the difference between a HMO and a PPO?

An HMO (health maintenance organization) and a PPO (preferred provider organization) are both managed care organizations that use certain procedures to manage the accessibility, cost and quality of healthcare. The levels of service and flexibility vary from plan to plan.

An HMO shares financial and delivery risks relating to health care services with those who are enrolled in a healthcare plan in exchange for a fixed, prepaid fee.

A PPO is a similar arrangement but the organization provides coverage for services through a preferred provider at a discounted rate. Services obtained by a provider who is not a preferred provider may be covered, but the rate may be substantially higher.

	3. What is a deductible?
A deductible is an amount of money that an insured person pays out-of-pocket before the insurance company becomes responsible for any benefit payments.

4. What is the difference in a co-pay and co-insurance?

Co-insurance is the portion of costs that are shared between the insured and the insurer. It is common for an insurance company to pay 80% with the insured being responsible for the remaining 20%.

A co-pay is a predetermined amount of money that the insured pays out for certain services. For example, if you have a $20 co-pay on doctor’s visits, you would pay the doctor $20 for every visit and the insurance would pay the rest of the doctor’s fee for that visit. Special services, like x-rays or lab work, aren’t usually covered under the co-pay for the doctor’s visit.

	5. Are co-payments counted as part of the annual deductible?
No, most insurance policies that have co-pays and deductibles handle doctor’s visits and hospital stays separately. You have to read the terms of your policy to be sure, but in most cases, a co-pay applies to the doctor’s visit and the deductible applies to hospitalization or other healthcare services.

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