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 family.
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.