Health Insurance Options
Health Insurance Options: What is the difference between indemnity health care plans and managed care health care plans? Learn what insurance plan is right for your situation.
Health care competition has driven prices down and gives consumers more options. Learn about different types of health insurance and determine which plan is best for you.
Look around you. How much of your every day life is affected by health insurance? If you are like most Americans, chances are it’s more than you think. Health insurance gives you vision care, dental services, and physical checkups, which all affect the quality of your every day life. Whether you are having kids or having a cold, getting proper healthcare can be the lynchpin that holds your life in place. Medical care is a private expense in the United States, and if you are one of the many people without healthcare, you may want to reconsider your options. There are numerous options for health insurance, and with medical costs rising, finding the right one for you is more important than ever.
Health insurance is broken down into two main types: indemnity plans and managed care. Due to their high expense, indemnity plans are rarely provided any longer. 1 Consequently, managed care has become more popular and more diverse, in the form of Health Maintenance Organizations (HMO) and Preferred Provider Organizations (PPO). Each plan offers different costs and benefits, which are important to consider in making your healthcare choice.
Indemnity plans are based on a wider variety of options at a higher expense. You have the freedom to use any medical provider at no additional cost. However, the deductible can be a few hundred dollars, and you are required to pay a percentage (generally 20%) of the “Usual and Customary” charges. 2 This is known as coinsurance. If you value having complete freedom in your healthcare and do not mind paying a greater price, an indemnity plan is likely the best option for you.
HMOs offer comprehensive health insurance coverage at a significantly lower cost than indemnity plans. As a result, they have become the most popular form of healthcare. With an HMO, the only expenses you incur are co-payments, typically $5, $10, or $20 each time you visit the doctor. However, with this low cost comes limited access. HMOs will tell you which doctors are covered within your healthcare plan. If you receive service from a doctor not covered by your HMO, you pay the bill. Additionally, many HMOs offer a point-of-service (POS) plan, in which referrals can be used to receive coverage outside of your network.
PPOs are a hybrid of managed care and an indemnity plan. Similar to HMOs, you are given a list of doctors in which costs are limited to co-payments. However, you are given the freedom to visit doctors outside your network at the increased cost of a deductible and additional co-payments. If you want increased coverage and do not mind paying for it, a PPO may be right for you.
Once you have decided which form of health insurance is right for you, decide which specifications of a plan are most important. Ask about hospitalization, dental services, physical exams, or anything that you are concerned about. When your questions have been answered, you are ready to sign up and enjoy the benefits of managed healthcare.
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