For many people, successfully managing and treating illness depends on a person’s access to high-quality health care. In the United States, access to high-quality health care usually requires health insurance. Health insurance can cover or offset the costs of cancer care.

Most people get health insurance through their employer or through government programs. These include Medicare or Medicaid. However, some people do not receive health insurance at work. Others are not eligible for Medicare or Medicaid. If this is your situation, visit www.HealthCare.gov to learn your options for purchasing health insurance. Or call 800-318-2596 (TTY: 855-889-4325).

HealthCare.gov is the official resource for health insurance provided through the 2010 Patient Protection and Affordable Care Act (ACA). This legislation also changed many rules for health care insurance coverage in the United States. Learn more about the Affordable Care Act and Cancer.

Types of private health insurance

Your out-of-pocket medical costs will depend on your insurance type. Find definitions for many of the terms used in this section in the glossary of terms related to cost.

Private health insurance

To pay for and control medical costs, private health insurers use different care models. Common types include:

  • Health maintenance organizations (HMOs)
  • Preferred provider organizations (PPOs)

HMO. An HMO covers costs within a network of contracted health care providers. Patients choose a primary care doctor from that network. That provider oversees the patient’s health needs. And he or she refers the patient to specialists when needed.

HMOs often have the lowest patient costs for private health insurance. At the same time, HMOs generally limit coverage in these ways:

  • You have fewer choices of doctors and hospitals. Only doctors and hospitals contracted with the HMO are covered under the plan. However, insurance companies may make exceptions for emergencies and medical necessity. And many HMOs allow visits to doctors outside the plan. You pay a higher fee, though. This is called “out-of-network” care.
  • Access to a specialist requires a referral from your primary care doctor.
  • You may need precertification for non-emergency hospital visits and some specialist care. This means you get the HMO’s approval before receiving care. HMOs also may require notification within 24 hours of emergency care.
  • Some types of services may not be covered.

PPO. PPOs contract healthcare providers to provide services at a reduced fee. These include doctors, hospitals, and other healthcare professionals. PPOs typically have a larger pool of in-network doctors than HMOs.

Most medical costs are covered when visiting in-network doctors. You only pay a small set fee called a co-payment or “co-pay.” Additionally, PPOs allow visits to any doctor without a referral. PPOs may provide freedom to visit out-of-network doctors. However, these visits may require you to pay a larger portion of the bill.

PPO restrictions may include the following:

  • You may be limited to accessing health care services from doctors and hospitals that are within the PPO network.
  • You may need to get precertification for some types of care, particularly if the facility or doctor is outside of the network.
  • Some types of service may not be covered.

Flexible Savings Accounts (FSAs) and Health Savings Accounts (HSAs)

Special bank accounts allow you to plan for medical expenses and receive tax benefits. Many employers offer these to their employees through private health insurance plans.

FSAs. Money is taken out of your paycheck throughout the year. It is pre-tax money to use for out-of-pocket medical expenses. You decide the amount of money based on your estimated expenses for the coming year.

Some plans provide an FSA debit card. For others, you pay first and submit your receipts for reimbursement. Any funds unused before the end of the year will be lost.

HSAs. The funds you put in an HSA do not expire. Any unused funds remain in your account for the next year. Additionally, you may keep the account from leaving a job. And you have the option to invest the money. However, only high-deductible health insurance plans offer HSAs.

What is a high-deductible health plan? You are responsible for 100% of costs until meeting a deductible. Usually, this deductible is several thousand dollars. Then, your insurance will pay 100% of covered medical services. You start with a new deductible each year.

Government-sponsored insurance programs

Medicare. Medicare is the federal health insurance program. It covers people 65 and older and some disabled Americans. It has different “parts.”

Medicare Part A covers these costs:

  • Inpatient care
  • Skilled nursing care
  • Hospice care
  • Some home care services

Medicare Part B covers these costs:

  • Physician services
  • Outpatient care
  • Physical and occupational therapy
  • Many cancer drugs are given in outpatient medical offices and clinics
  • Selected supplies that are deemed “medically necessary”

You are not required to enroll in Part B. However if you enroll later, you may face a late-enrollment penalty.

Medicare Part C is also called Medicare Advantage. It allows Medicare-approved companies to provide Part A and B benefits. In some cases, Medicare Advantage plans include Part D benefits.

Medicare Part D is a voluntary prescription drug benefit. It covers prescription drugs that are not otherwise covered under Medicare Parts A or B.

Medicare does not cover all health care expenses. As a result, some people who have Medicare purchase supplemental insurance policies. These may be private insurance products called “Medigap” policies. 

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