Types of Health Insurance
Indemnity Plans
You will only be reimbursed for “covered” medical expenses, as listed in the benefits summary. After the deductible, indemnity plans will pay a percentage of “usual and customary” charges and you will have to pay the difference. Any excessive charges above the usual and customary rate you have to pay. These plans have more expensive rates, and more out of pocket expense.
Preferred Provider Organizations’s (PPO’s)
Costs less because of negotiated discounts with doctors, hospitals and other providers, who then become part of the PPO network. Out of the network services are available at a higher cost.
Health Maintenance Organization’s (HMO’s)
Costs less than a PPO’s because treatment is only provided through the HMO network of hospitals and physicians which is usually more limited (you may not get the doctor or specialized treatment you want), emergency and urgent care is always available. The plan encourages preventative care for early diagnosis and treatment to reduce medical costs. Two types of HMO’s, the standard at risk where you have a primary care doctor who oversees all your treatment and has to make referrals to doctors he or she is affilated with, and not at risk, point of service plans where you can go to anyone in the network on your own. It relates to how doctors are compensated, with a standard HMO your primary care doctor is paid monthly whether you see him or not, with a point of service the doctor is paid for services rendered by the date of treatment.
Managed Health Care
Any organizational processes to improve health care quality or reduces costs; a network of providers and facilities, limited services outside the network; utilization review to determine if treatment is medically necessary, pre-certification or pre-authorizaton to determine what is the best method of treatment, and second surgical opinions are examples.