Types Of Plans
Basically, there are two general types of health
insurance plans, indemnity health plans (also called fee-for-service plans) and
managed care plans.
indemnity plan allows you to use any medical provider you wish. You do not have
a primary care physician to manage your health care needs. This is the least
restrictive of the various health care plans, but it is typically more
expensive. The focus of indemnity plans is on medical treatment, not necessarily
Either you or your employer pays a monthly premium. You will then be
responsible for a percentage of your medical expenses in addition to meeting a
yearly deductible for each family member. However, these plans usually have a
maximum annual out-of-pocket expense. Once this maximum amount has been paid,
your insurance company will pay your remaining medical expenses for the year.
Some indemnity plans do not cover preventive expenses like well-check visits.
There are three types of indemnity plans: basic health insurance, major
medical insurance and comprehensive insurance. Basic health plans cover hospital
room and care, some hospital services such as x-rays, surgery and some doctor
visits. Major medical plans cover treatment for long-term illnesses or injury
and comprehensive insurance plans cover a combination of items from the two
Managed Care Plans
A managed care plan is a health care
plan that pays for and supervises the medical services you or a family member
receives from an organized network of doctors and hospitals. The focus with
managed care plans is often preventive medicine to help keep medical costs down.
Managed care plans usually cost less; however, they offer you limited choice
concerning your health care. There are three types of managed care plans: health
maintenance organization (HMO), preferred provider organization (PPO) and
point-of-service plan (POS).
Health maintenance organization plans charge a fixed monthly fee or premium.
You choose a primary care physician from a group of eligible physicians for each
member of your family. The primary care physician then directs the family
member's health care needs. If you need to see another physician or specialist,
you must obtain a referral from your primary care physician; otherwise, your
insurance will not cover the expenses.
Preferred provider organization plans are like HMOs in that you pay a monthly
premium and are given a list of providers within the network. However, you are
not required to choose a primary care physician. Without a primary care
physician, there is no one to oversee your health care needs; however, you can
choose to see any physician outside of the network. You will simply pay more for
Point-of-service plans combine elements from both HMOs and PPOs. Like HMOs,
you must choose a primary care physician from within a given network for each
member of your family. However, the primary care physician may refer you to a
specialist outside of the network. If you are referred to a physician outside of
the network, you will be responsible to pay a higher amount for the
Choosing the Right Plan for Your Family