A Health Insurance Provider will be from any of the
following types: Traditional Insurers, Domestic, Foreign and Alien Companies, Blue
Cross/Blue Shield, Health Maintenance Organizations (HMO), and Preferred
Provider Organizations (PPO).
Health Insurance Provider: Traditional Insurers
In the eyes of the public, this type of company is one
that has evolved over time into a branded image. In today's world as Health
Maintenance (HMO) and Preferred Provider Organizations (PPO), this is the
opposite of what we have come to know.
A traditional insurer selling health coverage may
specialize in just health coverage. The types of insurance they sell may be
referred to as accident and health (A&H) or accident and sickness (A&S)
companies. Most states require a separate license to write life, health and
property casualty.
Types of Insurance
Companies:
- Stock Company - stock company
sells stock to raise the money necessary to operate a business. The
stockholders are not necessarily insured by the company nor do
policyholders necessarily own stock in the company.
- Mutual Company - Conversely, with
a mutual company the policyholders are also owners of the company and as
such, can vote to elect the company management.
Any dues beyond the
operating costs of the company may be returned to the policyholders as
dividends or reductions in future premiums.
Health Insurance Provider: Domestic, Foreign and Alien Companies
Here in the United States,
under the laws of one particular state, companies are generally organized and
chartered and it is common for them to do business in many states.
A domestic company is a company that operates its home
office in the state where it is organized.
In any other states where the health insurance providers
do business, the company is considered a foreign company.
If the home office of
a company is located outside the United States,
it is considered an alien company. Irrespective of whether it is domestic,
foreign or alien a company must be registered in every state in which they
operate.
Health Insurance Provider: Blue Cross/Blue Shield
Health Insurance Provider for These service organizations represents
producers' cooperatives. Hospitals and physicians who sponsor Blue Cross/Blue
Shield plans are providing the insurance; therefore, they are regarded to be
the producers of the cooperative.
Originally, Blue Cross and Blue shield were individual
voluntary and tax-exempt associations that give health insurance provider. Blue
Cross provided payments to hospitals and Blue Shield covered physicians,
medical and surgical fees.
People originally covered under these plans were
traditionally known as subscribers, since Blue Cross and Blue shield differ
from traditional insurance companies.
Health Insurance Provider: Health Maintenance Organizations (HMO)
The purpose of Health Insurance Provider at HMOs is to handle
health care by means of a prepaid model that accentuates early treatment and
prevention. This prepayment is referred to as a service-incurred basis and is
paid by the consumer.
This emphasis on prevention for example routine physicals,
diagnostic screening is paid for in advance. The model is a direct contrast to health
insurance plans that historically did not pay for preventive programs but only
paid after the fact for injury and illness.
In theory, the HMOs focus on prevention is eventually
supposed to reduce health care costs. At the same time, HMOs provide medical
treatment, hospital and surgical when needed.
The basic structure of HMOs comprises contractual
agreements with a variety of facilities and health care providers to provide
services to HMO subscribers.
Within this structure are four different types, Group,
Staff, Network and Individual Practice Association.
Group model - Early on this was the principal scenario. With
this arrangement, the HMO contracts with an independent medical group that
specializes in a variety of medical services and the HMO in sequence provides
these services to members.
Staff model - This arrangement is pretty self-explanatory
wherein the physicians are paid employees working on the staff of an HMO in a
clinical setting at the HMO physical facilities.
Network model - This arrangement works like the Group
model with the difference being that the HMO will contract with more than one
group to provide the services. The primary purpose for this model is to provide
convenience and increase accessibility for the members.
Individual Practice Association Model - This structure is
designed to give maximum flexibility to the HMO members wherein they contract separately
for all services. There are no separate HMO facilities and all services operate
beyond their own facilities.
There are several
types of groups that may sponsor HMOs, some of which are:
- Insurance
companies
- Labor
groups
- Consumer
groups
- Service
organizations (Blue Cross/Blue Shield)
- Government
entities
- Medical
schools or associations
- Labor
unions
- Physicians
- Hospitals
Most HMOs limits membership to a hardly defined group. For
example, a labor union might limit enrollment to active members of their union.
HMOs are required
to provide the following basic health care services:
- Preventive
services
- Diagnostic
laboratory services
- Diagnostic
and therapeutic radiology services
- Physicians'
services
- Hospital
inpatient services
- Outpatient
medical services
- Emergency
services
Many HMOs may also
provide the following, but are not required to do so:
- Nursing
services
- Long-term
care
- Mental
health care
- Substance
abuse services
- Prescription
drugs
- Vision
care
- Dental
care
- Home
health care
Health Insurance Provider: Preferred Provider Organizations (PPO)
In order to reduce medical costs, Health Insurance
Provider at Preferred Provider Organizations is another attempt. This is an
arrangement whereby a selected group of independent hospitals and medical
practitioners in a certain area take on provide certain services at a
prearranged rate.
The organizers and health insurance provider agree upon
medical service charges that are generally less than the provider would charge
patients not associated with the PPO.
These differ from HMOs in that the health insurance provider
are paid on a fee for service basis rather than receiving a flat monthly amount
and the organizer or contracting agency might be:
- An
existing HMO
- Large
employers
- Trade
unions
- Traditional
insurance companies
- Blue
Cross/Blue Shield
- Local
groups of hospitals
- Local
groups of physicians
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