Health Plan Choices

What Kind of Health Plans are Available?

When it comes to choosing a health plan it is important to determine your needs, so you can choose the type of plan that best fits your budget and lifestyle. The monthly premium for health plans varies and usually the lower your premium the less coverage your plan offers. Most health care insurance falls into one of two categories: indemnity and managed care.

What are Indemnity Plans?

Simply put, an indemnity plan is a fee for service plan. When you have an indemnity plan, you can choose any health care provider that you are comfortable with. When you visit your doctor, you then submit a claim to your insurance company for the cost of the visit. The insurance company then pays the percentage of the bill that they are contracted to cover. Some companies pay the doctor directly, meaning that you must pay your part on the day that you visit. Other plans require you to pay the bill in full and then the insurance company reimburses you for their amount. Most indemnity plans have an annual deductible that must be covered before they start to pay for your medical care.

What are Managed Care Plans?

Managed care plans usually fall into four basic categories: Preferred Provider Organizations (PPO), Health Maintenance Organizations (HMO), Point of Service Plans (POS), or Health Savings Accounts Plans (HAS)

• A PPO negotiates with doctors and hospitals finding health care providers that will accept lower fees from its members. If you belong to a PPO, you are required to choose doctors and health care facilities that are approved by your plan. Usually you are required to make a small co-payment when you visit your health care provider and the doctor’s office handles all the paperwork and communication with the insurance company. If you do decide to visit a doctor that isn’t a part of your PPO network, you will have to pay much higher fees and you will have to deal with all the paperwork and claim reimbursement your insurance company requires.

• An HMO requires its members to only visit doctors that are contracted to the company. HMO members pay very low co-payments for office visits and often are given preventative health treatments for free. When you are a member of an HMO, you are usually required to visit your general practitioner for all health issues and then that doctor will refer you to specialists as he or she feels it is necessary. Usually you will only be referred to specialists that are a part of your HMO network. With an HMO plan, you are not covered if you visit doctors that are not a part of your HMO. Your insurance will cover the visit to a non network hospital in the event of an emergency outside of your service area.

• A POS plan is a blend between an HMO and a PPO. When you have a POS plan you are asked to choose a primary doctor to manage your health care. When you visit this doctor, your cost is low. You can however, choose to visit a doctor that is not in the network you have chosen. This will result in higher co-pays, but the POS will try to negotiate the lowest cost possible, even with doctors that are not a part of their plan.

• HSA plans are simply PPO plans with much higher deductibles. Although the deductible for these plans is high, you can deposit the annual deductible amount into a tax deferred health savings account. Once you have met your annual deductible, you will be covered for all of your insured medical expenses for the remainder of the calendar year.