Types of Private Health Insurance
From SmartMedicalConsumer Wiki
In United States, people either buy health insurance through a group health insurance plan or buy an individual health insurance. In both cases, there are few major types of insurance plans.
What choice the patient is allowed to select providers (doctors, hospitals, etc.) is one of the main differentiator between different styles of medical insurance plans.
Under most of these plans, the patient pays a monthly insurance premium. Furthermore, insurance pays "most" but generally not all f the cost of a service, even if this service is covered under the patient's policy. The amount the patient is responsible for a given service depends on the policy's deductible, coinsurance, co-payment, Out-of-Pocket Maximum and the service’s Usual, Reasonable and Customary Charges (URC) determined by the insurer.
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Fee-for-Service (Indemnity)
Fee-for-service (a.k.a., indemnity) plans allow the patient to visit any doctor or hospital in the country. Referrals to specialists are not needed. Thus, the patient can go to the provider of his choice.
The patient needs to pay the fees for the service, and the either the patient or the provider submits a claim to the insurance company for reimbursement.
The insurance reimburses the patient for the covered medical expenses (which are listed in his plan’s benefits). The amount of reimbursement depends on the deductible, coinsurance, etc.
Health Maintenance Organizations (HMOs)
The insurance covers only the services if the patient uses the providers (doctors and hospitals) in the network of HMO. There may be few exceptions such as emergency care.
HMO plans typically require patients to pay only co-payments, rather than deductibles and co-insurance, and have no lifetime limits on coverage
The patient typically needs to select a primary care physician, who may be family practice doctor, internist, pediatrician, obstetrician, gynecologist, or general practitioner. The primary care doctor must give the patient a referral to see a specialist, unless it is an emergency. Today, some HMOs do not follow this primary care model.
Non-emergency hospital care may not be covered without precertification. In case of an emergency admission, either the patient or the hospital need to contact the insurance within a certain timeframe (e.g., 24 hours are 48 hours).
Point-of-Service Plans (POS)
POS plans combine features from both fee-for-service and HMOs, and offer more flexibility than HMOs in choosing physicians and other providers. That is, the patient has a choice between in-network service with a higher insurance coverage, and an out-of-network service with lower insurance coverage.
The deductible, coinsurance, co-payment and Out-of-Pocket Maximum are different for the in-network and out-of-network services.
Generally, the greater the emphasis on in-network care, the lower the premiums will be.
POS plans have primary care physicians who coordinate patient care. Premiums tend to be somewhat higher in PPOs and POS plans than in traditional HMOs.
If the doctor makes a referral out of the network, the plan pays all or most of the bill. If you refer yourself to a provider outside the network and the service is covered by the plan, you will have to pay coinsurance
Preferred Provider Organization (PPO)
PPO plans are very similar to the POS plans, except that most PPOs do not require a primary care physician, where POS plans have primary care physicians who coordinate patient care.
Consumer-Driven Health Plans
These health plans allow individuals and families to have greater control over their health care, in terms of choosing providers and how much they spend on health care services.
These plans have high deductibles. Until the deductible is reached, the patient pays for his medical care. The patient can pay for these services using a pre-funded spending account such as the ones listed below, often with a special debit card provided by a bank or insurance plan. Any unused balance in these accounts at the end of the year is rolled over to increase future balances.
The major types of consumer directed plans are:
