Health Insurance Is Important for Every Family
If you don’t have health insurance, you face the risk of financial disaster. Health insurance is no longer a luxury for families but has become a necessity. While technology in medicine has marched onward, the price we pay for that technology to help provide cures has dramatically increased the cost of medical care.
A number of different companies sell a variety of health insurance plans, but there are two basic types of plans and variations of each. The first is the managed care plan and the second is the traditional, also known as the fee-for-service or indemnity plan. Each one has benefits not found in the other. In order to understand which is best for your situation, you must know the benefits and drawbacks of each.
Managed care health insurance is not just one type of plan but includes three different plans. The first is the original of the managed care plans, the HMO. The HMO is a health maintenance organization. It’s very strict and is prepaid health care. You have a group of health care providers offered in each plan. If you use a provider, not in the plan, your policy won’t pay for your visit. Your doctor, your primary care physician, decides whether you should see a specialist or not. If you decide that a specialist is important to your health situation and your doctor disagrees, the plan won’t pay for the visit.
The other two plans are PPOs and POS plans. PPO stands for preferred provider organization and POS stands for point of service. These are similar to the managed care plans, except you can use the services of providers outside the network of physicians and health care providers and you don’t need a referral to see a specialist. However, with both plans, the insurance company pays less of the bill when you do see someone out of network.
Each time you visit a health care provider when you have a managed care plan, whether the HMO, PPO or POS, you have a co-pay. You also often have a maximum out of pocket amount for each year. The co-pay is often a smaller amount you pay for the doctor’s visit or hospital visit. People with prescription drug plans recognize the term. Managed-care plans work much the same way. When you visit a network doctor with a managed care plan, the co-pay may be as little as $5 or as high as $20. If you visit an out of network doctor with the same managed care health insurance plan, it may not pay at all if you have an HMO, or the co-pay could be double if you have a POS or PPO plan.
Traditional health insurance reimburses you for the cost you pay for health care. Normally these plans offer a deductible you pay out of pocket first before the insurance company pays any of the bills. Then you have co-insurance. Coinsurance is a percentage you payout of pocket and a percentage of the bill the insurance company pays until you reach the maximum out of pocket amount. Then the insurance company pays the entire bill. Traditional health insurance is often more expensive than managed care health insurance.