Your Choices in Health Care Plans Explained


Choosing between health plans can be difficult and confusing for
many people. Trying to find a plan that best fits you and your
families needs is not task. Most plans differ in the way they work
and how much you pay as a premium and co-pay. You will find that
some plans will pay for some services more than others and need to
look at what your individual needs are. Most plans today focus most
of their benefits to preventing illness and reducing the need of
medical attention by providing most of their coverage on
preventative visits and treatments. Many companies also require a
health screening and won’t pick you up if you have pre-existing
conditions. Check to see if premiums are higher for people with
chronic illnesses, such as diabetes or hepatitis, or for smokers.
There are two different types of coverage available, indemnity or
fee-for-service, and managed care.

The Indemnity Plan allows you to use any medical provider you want
to and not need to get any referrals when seeking specialized
treatment or care. You can also go to any hospital that you want
and not have to worry if you are covered. These plans tend to have
a deductible that needs to be met each year before they start
actually paying for some of the medical expenses. These deductibles
can range depending on the plan you need and are usually between
$200 and $1000 per year. The company will then start to pay a
portion of the bill; usually 80% is the standard. You would then be
responsible for the other 20%. Depending on your doctor you might
be responsible for this payment at the time of treatment. Some
doctors will bill you at a later date, but that is rare. Usually
these types of plans will pay for treatment and prescriptions but
not very preventative friendly. You might find you have to pay for
routine physicals and the like with type of plan.

Managed care is the plans most people are used to seeing and hear
most about. There usually are the choices of a Preferred Provider
Organization (PPO), a Health Maintenance Organization (HMO), or a
Point-of-Service Plan (POS). These have some very similar benefits
and you should read carefully through each one to see the
differences and figure out which one would be best for you and your

Preferred Provider Organization (PPO)

A PPO is very similar to an indemnity plan. It has arrangements
with doctors, hospitals, and other providers who have agreed to
accept lower fees from the insurer for their services. As a result,
going to any of the doctors listed on the plan as accepting this
type of insurance, you lower your cost. With PPO if you want to see
a doctor outside the network then you will need to get a referral
from a doctor with in the network first. That is where PPO differs
from indemnity plans. You will pay small co-pay whenever you go to
the doctor and for prescriptions. But you are covered when it comes
to physicals. When you do go outside the network you will be
responsible for the co-pay and extra money that doctor charges, so
your portion will be higher.

Health Maintenance Organization (HMO)

HMOs are the oldest form of managed care plan and been around a
long time. They offer a range of health benefits, including
preventive care, for a set monthly fee, co-pay on prescriptions,
and no deductible. There are several types of HMOs. There is the
type of HMOs offer at most jobs that is a staff or group model HMO.
Some HMOs contract with physician groups or individual doctors who
have private offices, called individual practice associations
(IPAs) or networks. You will be given a list of doctors to choose
from and will pick one as your primary care physician. This doctor
sees you whenever you have a health issue and for yearly check-ups.
If you need to see a specialist or other doctor he/she will give
you a referral. You will also need a referral to go to the
emergency room in some cases. With most HMOs you will pay nothing
to see your doctor, but some do have a very small co-pay of $5-$10
per visit. You must get a referral to go out of the network or be
required to pay for the visit in full. In some cases you might be
required to pay in full if there is a network doctor available and
you refuse to see that one.

What is a Point-of-Service (POS) Plan?

Some HMOs offer an indemnity-type option known as a POS plan. In
this type of HMO, a POS plan, members can refer themselves outside
the plan and still get some coverage. If your personal doctor
refers you to a doctor out side of the network you will be fully
covered by the plan.

DISCLAIMER: This information is for educational and informational
purposes only. The content is not intended to be a substitute for
professional advice. Always seek the advice of a licensed Insurance
Agent or Broker with any questions you may have regarding any
Insurance Matter.

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