Health Insurance Types
Today, fee-for-service plans come closest to the old major medical plans. A revolution in health care delivery, driven by the need to stop rocketing medical costs, has given people a new form of comprehensive health coverage known as managed care (HMOs and similar plans).
These days, most health insurance plans will require some sort of check up prior to any hosptial visits to check if a specific treatment is really needed. Statistics have shown this procedure has reduced unnecessary hospital costs by a good amount.
There is no single health plan that will cover every single medical expense. Most plans do not cover eyeglasses and hearing aids.
A guarantee issue policy is one that cannot deny a group coverage for medical reasons. Service organizations such as Blue Shield and Blue Cross and Health Maintenance Organizations are good examples of a guarantee issue policy. The health premium structure is based on the number of employees in the group, the area in which services will be provided and the industry of the company. Premiums will be a fixed amount based on single, couple, and family.
Types of Plans
* HMO (Health Maintenance Organization)
* POS (Point of Service)
* PPO (Preferred Provider Organization)
* Traditional V. HMO
Health Maintenance Organization
In an HMO, your medical care is managed by a primary care physician (PCP) that you choose. Your PCP becomes your personal physician, the doctor you see for all the routine medical care including annual physicals, immunizations and health concerns. If you need to see a specialist, be admitted to a hospital, have lab or X-ray work done, your PCP has to refer you to the appropriate provider or facility. In an HMO, you are required to stay within the HMO network to be eligible for benefits and the having the cost covered. At the time of service, you pay a small co-payment, keeping out-of-pocket costs low. With no claim forms to complete, an HMO is a very simple plan for you and your employees to administer.
PPO (Preferred Provider Plan)
What makes a PPO different than HMO is its “open access” nature. Open access means that while you stay within a network to receive full coverage, it is not requried that you choose a PCP. You may go to any network provider you choose, even a specialist, at any time. A referral for hospital, outpatient or ancillary services is not necessary unlike a HMO plan. You may go outside the network for care, but your benefits will be a bit lower and the out of pocket cost will be higher. PPO plans normally do not require any submission of claim forms while in-network. A big bonus about the PPO plan is that if you get into some serious accident where you have no control where you are taken, then you have nothing to worry about. However, if you are under a HMO plan and get taken to an out of network hospital, you may be reliable for all health costs.
POS (Point of Service)
A POS has similar features to an HMO, in that your medical care is managed by a primary care physician (PCP). Your PCP becomes your personal physician, the doctor you see for routine medical care including annual physicals, immunizations and health concerns. Referrals in-network are handled by your PCP and have a small co-payment at the time of service. An additional benefit in a POS is that you have the ability to self-refer to any physician, but with higher out-of-pocket costs. POS plans normally do not require any submission of claim forms while in-network.
In a Traditional Plan you have complete freedom of provider choice. Services that have been deemed medically necessary are paid out on a variety of cost sharing co-pay and deductible options. They don’t generally cover wellness and routine care, but it can be added in some cases for an additional premium. Traditional plans are the most flexible plan however the are also the most costly. They normally require submission of claim forms.