What does full coverage in health insurance really mean?

With no shortage of health plans, understanding your choices in health insurance can be challenging—but you're not alone. There are several indicators to look for when shopping around for full coverage health insurance. Every plan works differently upon your needs, whether you're looking for yourself, a group of employees, or your family. 

Understanding every term within your health insurance plan will reveal what coverage falls under each option. This is the best way to ensure you make an informed, educated decision when choosing a healthcare provider for yourself, your employees, or your family.

What does full coverage health insurance include?

Full-coverage health insurance typically includes any treatment needed that's offered by your healthcare provider. Basic coverage can be limited to preventive care, check-ups, and some emergency services. Of course, this varies by your insurance provider. To know exactly what your provider covers, you can request a full copy of your policy. Your policy will show whether your coverage is limited to specific doctors and hospitals, along with requiring copays or deductibles.

Another option: call your provider and ask specifically. Some full coverage health insurance plans still may exclude specific medical conditions under special circumstances, so it's important to learn what you are and aren't covered for.

According to healthcare.gov, all plans cover the following 10 essential health benefits:

  • Ambulatory patient services (outpatient care you get without being admitted to a hospital)
  • Emergency services
  • Hospitalization (like surgery and overnight stays)
  • Pregnancy, maternity, and newborn care (both before and after birth)
  • Mental health and substance use disorder services, including behavioral health treatment (this includes counseling and psychotherapy)
  • Prescription drugs
  • Rehabilitative and habilitative services and devices (services and devices to help people with injuries, disabilities, or chronic conditions gain or recover mental and physical skills)
  • Laboratory services
  • Preventive and wellness services and chronic disease management
  • Pediatric services, including oral and vision care (but adult dental and vision coverage aren't essential health benefits)

Coverage depends on your network

The first question to ask yourself is how many people you need coverage for. There are options for small, medium, and large businesses—with additional plans for individuals and families. You'll mostly find options categorized as HMO, PPO, and in some cases HDHP—so let's break down what each plan means.

HMO stands for Health Maintenance Organization. HMO is made up of a network with healthcare providers who agree to offer services at lower prices, predetermined and negotiated by an insurance company. Under an HMO plan, members need a referral from their Primary Care Physician (PCP) to see a specialist. i.e., Cardiologist, Psychiatrist, Endocrinologist, Obstetrician, or Neurologist.

PPO stands for Preferred Provider Organization, which offers more choices and a more extensive healthcare provider network. Referrals from a PCP are not required to see someone outside of their network, although this typically comes with an out-of-pocket cost.

A High Deductible Health Plan (HDHP) follows IRS rules but typically raises the deductible with a lower premium.

What does full coverage health insurance cost?

Your full coverage health insurance cost depends on premiums, deductibles, copayments, coinsurance, maximum amount, and allowed amount.

  • Your premium is what it costs to sign up for your coverage, typically split between you and your employer—and billed monthly.
  • A deductible is set at the start of your health insurance coverage term. When you meet that dollar amount, the rest of your medical care is covered for the remainder of that term unless your plan includes a copay or coinsurance.
  • If you have a copay, you agree to pay a fixed out-of-pocket dollar amount for each healthcare service and/or prescription medication.
  • Coinsurance is a percentage of your share of costs for a covered service after your deductible is met.
  • The maximum amount a plan will pay for a covered health care service. You may also see this on your policy categorized as an eligible expense, payment allowance, or negotiated rate.
  • If your provider charges more than the plan's allowed amount, you may have to pay the difference.

Additionally, health insurance plans typically have three standard savings accounts that aim to alleviate high medical care costs through tax advantages. They are the following:

  1. Flexible Spending Arrangement/Account (FSA)—an arrangement through your employer that lets you put tax-free dollars into an account to pay for healthcare expenses not covered by your plan. Your employer determines the maximum amount you can contribute—and then it's up to you to decide how much you want to put in.
  2. Health Reimbursement Arrangement/Account (HRA)—an employer-funded account that reimburses employees tax-free for qualified expenses up to a fixed dollar amount.
  3. Health Savings Account (HSA)—a medical savings account with pre-tax dollars for out-of-pocket medical expenses. You can only open an HSA with a High Deductible Health Plan (mentioned above).
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