Types of Health Insurance Author:    Posted under: Health InsuranceHealth Insurance questions answeredHealth Insurance Types

Health insurance comes in many forms. Although no one type of health care is considered better than another, it really is just a matter of what an individual may need. Health insurance plans can be classified as either Traditional or Managed care. Under Traditional Health Insurance are the Traditional Indemnity Plans (now called Fee-For-Service Plans). Under Managed Care are Preferred Provider Organizations or PPO, Point-of-Service Plans or POS and Health Maintenance Organizations or HMOs.

Traditional Health Insurance

Most people had traditional health insurance in the past. It is a type of insurance wherein you would have to pay a specific amount of your medical expenses in the form of a deductible and the insurance company pays a part or majority of the bill afterward.

Fee-for-Service Plan

This type of plan is also called an Indemnity Plan. It was the usual type of plan that people availed of before. This insurance plan gives the client autonomy over options such as doctors, hospitals and other health care providers to choose from. In example, it allows the client to visit the doctor without getting permission from the insurance company, whether it is necessary or not. The autonomy that this plan gives, however, is not absolute.

Although Fee-for-Service plans may allow the client some freedom or autonomy, it also entails more out-of-pocket expenses. In most cases, the client may have to pay first and then get the bill reimbursed by the insurance company. They also compare prices or fees with other practitioners and build a standard from the comparison made. For example, if your doctor charges you more than their set standard, they may require you to pay for the difference yourself.

Preventive care, such as annual check-ups and exams, may or may not be provided under fee-for-service plans.

Managed Care

It is a health insurance plan which controls the delivery of health services to its clients and the financing of these services. Its goal is to provide high quality health care which controls or manages costs. It is also necessary for them to ensure that the services they offer are necessary and appropriate for the patient’s condition. It works around a selected network of health care providers and offer significant financial incentives to those who use the providers in that network. In a nut shell, it assures quality care in the best possible setting under a certain plan that the client has availed of.

Preferred Provider Organizations (PPOs)

A PPO plan ensures client loyalty to its health care provider network. It offers large financial incentives to those who would avail of services within that network. If a client, for example, visits a doctor that belongs in the network, the insurance company then would give the client an exact amount of co-pay. If the client chooses, however, to visit a doctor that is outside of the network, the client would have to pay a deductible or pay the difference between the fees that the in-network and the out-of-network doctors charge. The client may also have to pay up front and then file the bill for only 80 percent reimbursement.

Preventive care services may or may not be included in a PPO.

Point-of-Service (POS)

This plan is similar to PPOs or Preferred Provider Organizations but it introduces another element: the Primary Care Physician. The PCP is a lot like a gatekeeper. You may choose your PCP among the network of doctors that the plan belongs to.

The PCP is in charge of your referrals. You may choose to refer yourself to an out-of-network doctor and still avail of partial coverage but it would require more paperwork and out-of-pocket fees. If your PCP, however, is the one who refers you to an out-of-network doctor, the insurance plan should shoulder most of the cost. POS plans cover more preventive care services and even some health improvement programs.

Health Maintenance Organizations (HMOs)

HMO is the least expensive yet least flexible type of health care plan. It also tends to be more inclined toward group plans than individual plans.

It offers the lowest amount of co-payment (or none at all), low premiums and small amounts or minimal paperwork. However, it requires you to see only the doctors in its network and consult your primary care physician before seeing a specialist. The client would need to get a clearance before even visiting the emergency room.

HMOs usually have main offices and central medical clinics or a network of individual practitioners. Clients must see in-network or HMO-approved physicians and doctors; otherwise, they would have to pay the cost of the entire visit themselves. HMOs have the best coverage of preventive care services and health improvement programs.


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