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| TYPES OF COVERAGES |
FEE-for-Service Plans:
(also known as indemnity plans) are the oldest form of health insurance coverage. Fee for service health insurance policies expect you to pay the fee each time you see a health professional. These plans are the most expensive but offer the most freedom and flexibility. Participants choose their own doctors and hospitals, and can refer themselves to specialists with little interference from insurance companies. These plans require large out-of-pocket expenses. Patients pay medical fees up front and then submit bills for reimbursement.
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Managed Care Plans:
these types of plans attempt to keep the costs of health care low, while ensuring that participants in the health insurance plan get the right care for the right condition in a timely fashion. A majority of Americans participate in some form of managed care health insurance plan.
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Managed care health insurance plans include:
1. Health Maintenance Organizations (HMO's):
These plans typically enable members to have lower out-of-pocket healthcare expenses but also offer less flexibility in the choice of physicians or hospital than other health insurance plans. As a member of an HMO, you'll be required to choose a primary care physician (PCP). Your PCP will take care of most of your healthcare needs. Before you can see a specialist, you'll need to obtain a referral from your PCP.
With an HMO you'll likely have coverage for a broader range of preventive healthcare services than you would through another type of plan. You may not be required to pay a deductible before coverage starts and your co-payments will likely be minimal. With an HMO plan, you typically won't have to submit any of your own claims to the insurance company. However, keep in mind that you'll likely have no coverage whatsoever for services rendered by non-network providers or for services rendered without a proper referral from your PCP.
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2. Preferred Provider Organizations (PPO's):
a PPO has arrangements with doctors, hospitals, and other health care providers who have agreed to accept lower fees for their services from the insurer. As a result, cost sharing is lower for plan members within a PPO network. Network health care providers make referrals, but plan members can self-refer to doctors and specialists, including those outside the plan. Participants who visit network doctors pay co-payments, or set amounts for certain services; individuals who venture outside the network pay higher fees in the form of deductibles and co-payments. PPO members are also required to make up the difference between what their personal provider charges and what the health care plan pays.
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3. Point of Service (POS):
plan combines some of the features offered by HMO and PPO plans. As with an HMO, primary care doctors in POS plans usually refer patients to other providers in the plan. But members can refer themselves outside the plan and still get some coverage. If the doctor refers out of the network, the plan pays all or most of the bill. If POS members self-refer to doctors or specialists outside the network, they will have to pay a predetermined amount of coinsurance.
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