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Diverse Categories Of Health Insurance
There are a number of different types of health insurance coverage and this is but understandable. Individuals have different needs and varying purchase powers and thus one cannot have a single type of health insurance. Health insurance is a facility whereby you and your family have access to the healthcare you need without the concomitant financial strain.
It is common knowledge that the cost of health
insurance will be higher for a policy that provides a greater
degree of coverage and flexibility than a policy that provides less coverage
or less flexibility.
It is good to know that health insurance policies fall into two basic categories – Managed Care Health Plans and Indemnity Health Plans. The latter is also called ‘fee for service’ plans. Managed Care Health Plans is more concerned with prevention and the premium charges are lower.
Indemnity Health Plans envisages total coverage and the premium payable is obviously higher.
Indemnity Health Plans reimburses the owner all medical expenses subject to certain limitations. One method of reimbursement is the insured can claim the actual expense of medical care regardless of value. There may be some services cost that may be disallowed. Another method is the insurance company pays a fixed percentage of the actual charges regardless of the cost, and the insurance owner pay the balance.
With any health plan, however, there is a basic monthly premium, which an individual or his employer is obliged to pay. There may also be other payments one must make, which will vary from plan to plan. Thus while considering any plan, you should try to figure out how affordable the total cost to you and your family will be. It is also a fact that indemnity plans offer the insurance owner a much wider choice of doctors including specialists, hospitals, and other health care providers than managed care plans.
Different Types of Managed Care Plans
A Managed Care Plan is strikingly different from an indemnity plan and there are three different types of managed care plans.
HMO (Health Maintenance Organizations) PPO (Preferred Provider Organization) and POS (Point of Service Plans)
HMOs provide treatment on a prepaid basis, so the members of the HMO pay a set monthly fee regardless of the amount of medical care needed or received. PPO is an organization comprising of doctors and hospitals that only serve a specific group or association.
As a PPO member, you generally pay for services and later receive reimbursement for the cost of the treatment less your co-payment.
POS plans are designed in a way whereby the insured does not pay a deductible and only pays a minimal co-payment. POS programs generally require the insured to choose a primary care physician who makes referrals to other specialists, as need arises.
The question that is often asked is ‘which type of health plan is best
suited for me and my family?’ It is not possible to offer a categorical
reply. Choosing health
insurance plan, as people know, is a balancing act between
cost and health protection. One has to seriously study both health care
needs and affordability before deciding on the most appropriate policy.
Each type of health care
policy suits certain individuals and not the others.
For more information on our services contact insurance brokers John Good| Kelly Good