What do all of these initials stand for?
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I’m trying to shop for health insurance coverage, but it doesn’t seem like anything is written in English. Can you please help me understand HMO, PPO, EOB, EOC and other related initials?”
Asked June 30, 2015
You can find a glossary of health insurance terms on this site or simply ask your insurer about terms you are not familiar with. Of the abbreviations you mentioned, two are types of health insurance plan, and the other two are terms used in your medical and health insurance billing. Knowing what the abbreviations mean will let you know what you are talking about, but may not be very helpful in comparing plans or getting the best coverage for your needs.
HMO is short for Health Maintenance Organization, and indicates a health plan which uses a network of professionals. If you get medical care outside the network, you may have to pay for the entire bill out of pocket. HMO plans are the most popular type of group health insurance. The next set of letters is PPO, and indicates the most popular alternative to an HMO, a Preferred Provider Organization. This type of plan uses a healthcare network like an HMO, but you are allowed to get medical care outside the network. When you do, the plan will pay for the care up to the amount it would pay in-network, and you pay the difference out of pocket.
Explanation of Benefits, or EOB, is a document which accompanies your billing in most cases, and fully describes the benefits addressed in the billing. EOB can also represent a part of your policy describing the benefits available, but is more commonly used in the first sense. EOC means Evidence of Coverage, and represents the connection between your medical care and how it will be billed. At its most basic, EOC indicates that you have health insurance in place at the location where you are seeking medical care.
Regardless of the type of plan you get, one of the most important pieces of information you should ask about is the maximum annual out of pocket expenses you will face. You may only be paying a small amount per visit, but if your maximum annual cost is $15,000, you're still going to be spending that amount between copays, coinsurance, and other expenses. The best advice is to do some comparison shopping, even if you are planning to buy your health insurance through your employer. By getting a free health insurance quote online, you can see how the price you'll pay through your job compares, and may discover that you can reduce the costs by getting your insurance independently. To get a free online quote, you can fill out a single form on this website and receive quotes from multiple competing insurers.
Answered July 13, 2015 by Anonymous