Cheaper Home Insurance Quotes

Types of Health Insurance

Health insurance plans all have a lot in common; namely, they all come with a premium that you or your employer must pay every month. Some plans come with other associated fees, which you should learn about before you decide on a policy. In this article, you will learn more about managed care and indemnity plans, which are the two main types of health insurance available today.

The indemnity plan is sometimes referred to as a fee for service or traditional plan, and it has the most flexibility as it allows you to go to any hospital or doctor you choose. In exchange for that flexibility, you pay a deductible plus a portion of your medical bills per year. Once your deductible has been met, most of these plans pay a "usual and customary" amount for the services that were covered. If the service provider charges more than the insurance company is willing to pay, you must pay the copayment and the extra amount. The indemnity plan usually covers prescriptions and diagnostic tests from physicians and emergency rooms, but it does not always pay for preventive medicine.

Managed care plans are the other main option. There are three types of managed care plan: HMO, PPO, and POS plans. The PPO, or preferred provider organization is a mixture of the indemnity and managed care programs. Each time you seek medical attention, you can use any doctor on the PPO network, or go to an out-of-network doctor if you choose. The amount you pay will be less if you use a preferred provider, but you can see a doctor whenever you want.

An HMO, or health maintenance organization, requires that you pay a copayment when you use an in-network doctor. In most cases, HMO plans come without a deductible, and the plan member chooses a primary care doctor who oversees all their health care and serves as a referral agency for specialist care. If you go to a non-network doctor, you pay the full price unless it's an emergency. Most HMO plans are cheap, and pay for preventive care and disease management. HMOs come in group models, and individual practice associations. Most HMOs charge no copayment for doctor visits, but some do charge a nominal fee for some services.

The final managed care option is the point-of-service plan. Most HMOs offer the option, and it has more in common with indemnity plans than the other two managed-care choices. The POS plan is sometimes referred to as an "open access" HMO, and they add to the standard HMO benefit list the ability to go to an out-of-network physician. As is the case with other HMOs, you will select a primary care doctor who'll oversee your care and refer you to a specialist, if needed. However, if you decide to go out-of-network, you will pay a greater percentage of your medical bills. Knowing more about the various types of health insurance will make it easier to choose the right plan for you and your family.