Healthcare Benefits

Types of Medical Insurance
 
Since health benefits were introduced in the U.S. marketplace in the 1940s, they have been both a blessing and a curse. No one wants to be without them, but few of us can afford to pay full freight either. Most people get health insurance through their jobs or are covered through a family member's insurance. This is called group insurance. Group insurance is generally the least expensive kind. In many cases, the employer pays part or all of the cost. Some organizations offer only one health insurance plan and others offer a choice of plans: a fee-for-service or indemnity plan, a health maintenance organization (HMO), or a preferred provider organization (PPO).

If your employer does not offer group insurance, or if the insurance offered is very limited, you can buy an individual policy. You should compare your options and shop carefully because coverage and costs vary. Individual plans may not offer benefits as extensive as those offered by group plans. Before you buy any health insurance policy make sure you know what it will pay for and what it won't. To find out about individual health insurance plans, you can call insurance companies in your community.

Indemnity or Fee-for-Service coverage
Indemnity health insurance plans allow you go to the doctor of your choice and pay for services at the time of the visit. The amount that your health insurance company will pay is a predetermined benefit level of covered medical expenses, based on your deductible and co-insurance amounts. To receive payment for medical expenses, you may have to fill out forms and send them to your insurer. Sometimes your doctor's office will do this for you. You also need to keep receipts for prescription drugs and other medical costs. For this type of coverage, you are responsible for keeping track of all your medical expenses. Although this type of plan is uncommon, it still may be in place in some rural areas where employees live beyond major carriers' managed care networks.

Managed care coverage
Unlike an indemnity plan, managed care is a health insurance plan like an HMO, PPO, or POS (described below), that encourages insured individuals to use certain providers. A managed care plan requires or creates incentives for an insured person to use providers that are owned, managed, or under contract with the insurer. These incentives may be financial incentives or additional benefits. Managed health care plans differ widely in their details, however, all will seek to steer a patient toward a pre-approved network of doctors and facilities, as well as limit coverage of any treatment sought outside the network.

Health maintenance organizations
When you join a health maintenance organization (HMO), you pay a fixed monthly fee called a premium. In return, the health insurance company and its physician network provide a variety of medical benefits. From this network, you choose a primary care physician, who is then responsible for your health care as well as for making referrals to specialists and approving further medical treatment. Usually, your choice of doctors and hospitals is limited to those within the network since they have agreements with the HMO to provide your health care. However, exceptions may be made in emergencies or when medically necessary. Generally, the health care services offered will require you to make a co-payment. The drawback of any HMO policy is that care received outside of the health care network is not covered.

Preferred provider organizations
Preferred Provider Organization (PPO) health care plans operate like an HMO in that you pay a fixed monthly premium, and the health insurance company and its health care network provide medical benefits to you. However, under a PPO insurance plan, a primary care physician is not required. As a result, seeing a specialist does not require a referral. If you need or want health care from outside the network, you should expect to pay a higher co-payment or co-insurance than if the provider were from within the PPO network. In essence, each time you need medical attention, you can decide between a higher costing plan with freedom of choice or a lower costing plan that restricts your care to within a network.

Point-of-service plans
A point-of-service plan (POS) attempts to combine the freedom of a PPO with the lower cost of an HMO. The POS is based on the basic managed care foundation: Lower medical costs in exchange for more limited choices. When you enroll in a POS plan, you are required to choose a primary care physician to monitor your health care. This primary care physician must be chosen from within the health care network, and becomes your "point of service". The primary POS physician may then make referrals outside the network, but then only your health insurance company will offer some compensation. For medical visits within the health care network, paperwork is completed for you. If you choose to go outside the network, it is your responsibility to fill out the forms, send bills in for payment, and keep an accurate account of health care receipts.