Understanding the Different Types of Health Care Insurance

2007-03-08 10:33:40

( Health )



There are basically two major groups of health care insurance coverage - indemnity and managed health care. The managed health care type is further subdivided into the health maintenance organization (HMO), the preferred provider organization (PPO), and the point-of-service plan (POS). All types of health care insurance coverages differ in terms of costs of enrollment and bills, freedom to choose doctors, services covered, eligibility, and procedures for referrals and special cases.

Indemnity Plans

Under an indemnity type of health care insurance coverage, you can consult any doctor under the sun, pay the bill first, then seek reimbursement of part of your medical expenses from the insurer. After paying the deductible of about several hundred dollars, you will need to pay about 20% of your medical costs while the insurer takes care of the rest. Some insurers do not cover any pre-existing condition you might be having, until after a year has elapsed.

This type is best for you if you have a chronic or special condition, if you would rather trust only certain doctors, or if you travel to different parts of the world, as it has global coverage. Needless to say, you must be able to afford it, since it is also the most expensive.

Health Maintenance Organization (HMO)

This managed health care plan has its own medical facilities and staff. You also choose a primary care physician who will maintain your health records and refer you to specialists if needed. You will not be covered if you use doctors and facilities outside the plan.

This type of plan is most practical if you don't need to see a doctor regularly, if you are not particular about any doctor, or if you are highly mobile. It is probably also the cheapest option.

Preferred Provider Organization (PPO)

A PPO has arranged with certain doctors and facilities to be part of a network which will charge lower fees for consultation and services. If you visit a doctor who is part of the network, you just need to make a small copayment for consultation, services, and prescriptions. But if you use an out-of-network doctor or facility, you will have to pay coinsurance which is the difference between actual expenses and the amount that your insurer is willing to cover.

Point-of-Service (POS)

This is a combination of the HMO and indemnity types. You don't need to secure a referral from your primary care physician in consulting other doctors outside the plan, yet you will still be able to get some coverage from your insurer. The monthly enrollment fees are of course higher than that of an HMO.

General Tips

Be sure to shop around carefully to get the best package, especially if you want to cover both yourself and your family. Look carefully at the list of doctors, facilities and services covered.

Consult your employee benefits department or call the insurance companies directly for any questions you might have. Better understanding is the key to attaining long term health care insurance benefits.


All rights Reserved © Tradenet Services srl
Do not duplicate or redistribute in any form.