No one type of health care plan is better than the other. It
really based on your needs and preferences. Some people take please in the
autonomy offered by fee-for-service plans, while others prefer the low costs
associated with closed-panel HMOs.
Also, distinctions among the types of plans
may blur as health insurers compete for business.
Health insurance can be divided into two broad categories:
Traditional and Managed care. There are four basic types of
plans within those categories:
- Traditional
indemnity plans, which are now often called fee-for-service plans;
- PPO,
or Preferred Provider Organizations;
- POS,
or Point-Of-Service plans; and
- HMOs,
or Health Maintenance Organizations.
Traditional Health Insurance
Most people had traditional indemnity coverage up until
about 30 years ago. These days, it's often known as
"fee-for-service."
Indemnity plans are a bit like auto insurance: you
pay a specific amount of your medical expenses up front in the form of a
deductible and afterward the insurance company pays the majority of the bill.
Fee-for-service
This is the conventional type of health care policy.
Insurance companies pay fees for the services provided to the insured people
covered by the policy. Most choices of doctors and hospitals is offered by this
type of health insurance.
You can choose any doctor you wish and change doctors
any time. In any part of the country, you can go to any hospital.
The insurer only pays for part of your doctor and hospital
bills with fee-for-service. You pay a monthly fee, called a premium.
You may have to fill out forms and send them to your insurer
to receive payment for fee-for-service claims. Sometimes your doctor's office
will do this for you. For drugs and other medical costs, you also require
keeping receipts. For keeping track of your own medical expenses, you are
responsible.
Managed care
In the United States, you will hear the term "managed care"
quite a lot. To help control costs, it is a way for insurers. The amount of
health care you have to use can be influenced by managed care. To help control
costs, almost all plans have some sort of managed care program.
For example, if you need to
go to the hospital, before you are admitted to make sure that the
hospitalization is needed; received the approval from your insurance company is
need in one form of managed care. You may not be covered for the hospital bill
if you go to the hospital without this approval.
Preferred
Provider Organizations (PPOs)
A combination of traditional fee-for-service and an HMO is the
preferred provider organization. Similar to an HMO, there are a limited number
of doctors and hospitals to choose from.
Most of your medical bills are covered
when you use those providers (sometimes called "preferred" providers,
other times called "network" providers).
You present a card and do not have to fill out forms when
you go to doctors in the PPO. For each visit, usually there is a small
co-payment. You may have to pay a deductible and coinsurance for some services,.
A PPO requires that you choose a primary care doctor to
monitor your health care as with an HMO. Preventive care was covered by most
PPOs. This usually contains doctor visits, well-baby care, immunizations, and
mammograms.
You can use doctors in a PPO, who are not part of the plan
and still receive some coverage. You will pay a larger portion of the bill
yourself (and also fill out the claims forms) at these times.
Some people like
this option since even if their doctor is not a part of the network, it means
they do not have to change doctors to join a PPO.
Point-of-Service (POS)
Point-of-service plans are similar to PPOs, but they bring
into light the gatekeeper, or Primary Care Physician. From among the plan's
network of doctors, you'll require choosing your PCP.
You can choose to go out of network and still get some kind
of coverage as with the PPO. Though, you usually must go through your PCP in
order to get a referral to a specialist. You can still choose to refer
yourself, but it'll mean more hassles and more money coming out of your pocket.
The plan should pick up most of the cost if your PCP refers
you to a doctor who is out of the network. But you'll probably have to handle
more paperwork and a smaller reimbursement if you refer yourself out. If you go
outside the network, you may also have to pay a deductible.
More preventive care services, and may even offer health
improvement programs like workshops on nutrition and smoking cessation, and
discounts at health clubs are covered by the POS plans.
Health Maintenance Organizations (HMOs)
Health maintenance organizations are prepaid health plans. You
pay a monthly premium as a member of HMO. In return, for you and your family, the
HMO provides comprehensive care along with doctors' visits, hospital stays,
emergency care, surgery, laboratory (lab) tests, x-rays, and therapy.
Either directly in its own group practice and/or through doctors
and other health care professionals under contract, the HMO arranges for this
care.
Usually, your choices of doctors and hospitals are limited to those that
have agreements with the HMO to provide care. However, exceptions are made in
emergencies or when medically necessary.
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