Confusing Alphabet Soup of Health Insurance

PBS just published a good article on the confusion of all of these healthcare terms that continue to invade our daily life. Many people struggle with the alphabet soup of healthcare insurance. I will give you a perspective today on the most commonly used terms and what they mean. For reference, you can find the PBS article at

  1. HMO
      This stands for Health Maintenance Organization. HMOs are typically the cheapest products on the market. They provide a lower price based on the fact that there are typically incentives to certain physicians and facilities in the network to lower the use of healthcare by the patients who have chosen and HMO as their healthcare plan. These arrangements have a true “gatekeeper” model where nearly everything, from physical therapy to imaging to surgery, must be approved by the primary care physician.
  2. PPO
      This stands for Preferred Provider Organization. PPOs are more expensive and provide the patient with more choice. These are typically arranged without the need to consult with your primary care physician prior to seeing a specialist, getting an MRI, or seeing a therapist. In most cases, there is a preferred network of providers that are available to you “in-network” with a lower deductible and copay. Most still offer “out of network” benefits if you would like to see a doctor who does not participate in or contract with your PPO insurance plan.
  3. Copay
      This is the amount you pay for a given service or item. Typically, we talk about copays with regards to office visits to physicians and buying prescription medications. Copays are generally a set amount, although there is typically tiered pricing. In many plans, insurance companies are shifting to copays for prescription medications only after your deductible has been met.
  4. Deductible
      A deductible is the amount of money you must pay out of pocket before certain insurance benefits become available to you. Sometimes you must meet a deductible for your prescription medications before a copay price is available to you. In most cases, you must meet a deductible before coinsurance is applied. Many insurance plans have different deductibles for “in network” vs “out of network” and different deductibles for each individual vs the family. Meeting the individual deductible does not mean that everyone in your family now only has to pay coinsurance or copays, but if you meet the family deductible, each individual is now eligible for copays or coinsurance regardless of whether or not they met their individual deductible
  5. Coinsurance
      Coinsurance refers to the percentages that the insurance company and the covered patient are each responsible for when a bill arrives. Coinsurance typically starts after a deductible is met. A common coinsurance percentage is 80/20, where the insurance company pays 80% of remaining bill after a deductible is met. Typically, there are different coinsurance amounts for in network and out of network

    Out-of-pocket maximum

      This is the maximum amount one can pay in a given year, including copays, deductibles, and the patient portion of coinsurance


Joe has insurance through ABC insurance company with a $3000 deductible and 80/20 coinsurance. He has surgery, with bills from the hospital, surgeon, and anesthesiologist that add up to $10,000. Joe will have to pay the first $3000 (assuming he had no other medical bills that year) and then 20% of the remaining amount ($10,000 – $3,000 = $7,000). He therefore owes $3,000 (deductible) plus $1400 ($7,000 * 20%) for a total of $4400. His insurance company will pay $5600 (80% of $7000). If Joe had surgery again later that year, he would immediately be responsible for only 20% of the cost, as he will have met his deductible for the year

Jeff TuffsJeff Tuffs
16:55 13 Apr 22
Very professional, and the conversation was understandable to even a layman. They didn’t try to push an agenda, but instead provided options.Very satisfied with my visit.
Yesenia MartinezYesenia Martinez
16:42 04 Apr 22
Thank you Everyone from Texas Spine & NuHope for offering what was needed in the process of a journey & a chapter of my life. With the hope and believing God was with me every step of my journey. I was bless to meet Dr. Adam Bruggeman as my spine doctor/surgeon & his medical team assistants, the care that was much needed!The surgery was a success, recovered well, was active again going back to the gym faithfully but after 2 years feeling pain again due to alarming physical and mental pain.By the Grace of God I am healed in not needing a second surgery that was going be quite different than the laminectomy surgery.God is Good. I thank God for medical teams and doctors that have the knowledge and guidance with the gift of helping others that are in need of Medical Necessity, God bless you All.Do not have fear of what God is able to do and what a surgery can do that is needed to live a better lifestyle to reduce the pain or have no pain at all.Thank you.-Yesenia
Lupita FloresLupita Flores
18:43 11 Mar 22
I have had 2 surgeries with Dr. Bruggeman and have done well. Dr Paredes is very courteous, professional, and treats us like family. All the staff is super friendly. I highly recommend this practice.
Mario GonzalezMario Gonzalez
20:16 28 Feb 22
This was my first time surgery and I was confident to leave this kind of surgery on Dr Adam Bruggeman.
Heather BlakleyHeather Blakley
12:04 01 Feb 22
I could write a novel but will try to be brief. I spent a large portion of my life ignored for the serious pain I lived with and Dr. Bruggeman discovered exactly what I was living with. It’s a rough road but he has made such a huge difference in my quality of life. I thank God I am in his care. His staff is hands down the best I have ever experienced. Dr. Bruggeman and his staff are all smart, kind, professional and there to help in every way. God bless you.