Frequently-Asked Questions - The David Fluker Health Insurance Agency - Gilroy, California

Q1. Do you charge a fee for your services?

A. No. Health Insurance in California is provided at a fixed premium. The premium cannot be different no matter how you purchase a policy (once it has been determined by an underwriter). The insurance carrier pays a commission from the premium to the agent.

Q2. Can I save money by buying direct from the health insurance company?

A. No. The premium is the same whether you use the services of an independent agent or purchase directly from the insurance company. The carrier will still charge the premium which includes the agent commission and will simply pocket the commission.

Q3. What is the difference between an "agent" and a "broker"?

A. In California, the term agent is used to describe a licensed sales agent, either independent or captive, who sells a company's insurance products and earns a commission from the company.

A broker is a licensed agent who is not allowed to earn a commission from the sale of any insurance product, must post a separate bond with the state, and who charges a fee for services.

The term "broker" in California is often misused, even by the insurance carriers.

Q4. What is the difference between my deductible and my annual out-of-pocket maximum?

A. The deductible is the portion of costs under your health plan for which you are responsible before the insurance company begins paying for services. The annual out-of-pocket maximum is the amount per calendar year that you would be responsible for before the insurance company covers in-network covered services at 100%. Some plans include the deductible in the annual out-of-pocket maximum, some do not.

Q5. What is co-insurance and how does that work?

A. Co-insurance is the sharing of costs for services under a health insurance policy between the insured and the insurance carrier. For every covered service the insurance carrier pays a certain percentage of that cost and the insured pays the remaining percentage. Most common currently are 70/30 and 60/40 where the insurance company pays the higher percentage.

Most PPO plans have a co-insurance after the initial deductible until the annual out-of-pocket maximum is met.

Q6. What is "Balance Billing"?

A. "Balance Billing" is a term which refers to a situation where the provider of medical service (doctor, hospital, etc.) bills the patient for services above the amount known as the NFR (Negotiated Fee Rate) for a particular service or services. In California, HMO and PPO plans strictly prohibit a participating provider from balance billing a patient for services.

Q7. Do I have to pay my deductible before the insurance company pays for any covered services?

A. It depends on the service and plan. Most HMO plans have a deductible that applies to either inpatient hospital and/or outpatient surgery services only.

Many PPO plans provide preventative care benefits at a copay (expressed either as a fixed-dollar or a percentage) without having to meet a deductible first.

Q8. What is the difference between a HSA-compatible PPO and a regular PPO?

A. A "regular" or traditional PPO plan is usually designed with a deductible and co-insurance component which does not necessarily have to be met, or met in full, to receive covered services. Also, traditional PPO plans normally offer a prescription drug benefit as a separate benefit within the overall plan with appropriate co-pays and, if included, brand name deductibles.

HSA (Health Savings Account) compatible PPO plans may offer preventative care benefits without having to meet a deductible, however all other benefits including prescription drugs are inclusive in the health portion of the plan and subject to the plan deductible before any payment is made for covered services by the insurance company.