Health Insurance plan descriptions

Health Insurance

The health industry has changed significantly. It is important therefore to learn as much as possible about a proposed health plan before you buy coverage in a group employee plan or individual policy. Consider the following aspects of insurance plans that you participate in, Plan Types, Coverage and Costs.
(Terms of Use)

Plan Types

Health Maintenance Organizations (HMO's)

These plans become extremely popular due to their comprehensive health insurance coverage and low cost advantages. The cost of premiums and employee contributions are lower due to the high presence of cost containment features.

Advantages:

There are usually no deductibles and co-payments to doctors can vary.
Paperwork is minimal for the patient because there are no claims to submit.

Disadvantages:

The primary care physician acts as a gate keeper for specialists and the physician must submit and agree to the referral.
The price of receiving lower premium payments is off-set by the large number of cost containment elements in the plan such as authorizations, referrals, etc. There is also a limited drug formulary.

Preferred Provider Organization (PPO)

These plans combine the aspects of an HMO plan with a traditional indemnity plan.

Advantages:

The patient makes a co-payment for outpatient visits and/or prescriptions.
A patient can continue to see their physician even if there doctor is not part of the preferred provider network, although this will be at a reduced payment level.
Services are usually not restricted and are more flexible.
Doctor/patient relationship is not significantly infringed upon by the insurance company.

Disadvantages:

Claims must be submitted for the payment by the medical provider. The premiums and employee contribution costs are higher than those of HMOs.

Traditional Indemnity Plans

People who want freedom in the selection of their medical providers and who are willing to pay more for insurance can choose these plans. They offer unrestricted assets to medical care and are accepted by all doctors.

Advantages:

The plan allows an individual to choose any health care provider.
They have few restrictions.

Disadvantages:

The absence of any cost containment features creates high premiums.

Coverage

Do you require specific benefits in your health plan? Prescription coverage, well child care, immunizations, well woman check ups, annual physicals, maternity care. The more benefits you select for your health plan the greater the premium. Another consideration is if your current physician is included in the plans provider network and is there a wide selection of primary care physicians or specialists. The bottom line is choosing the correct health plan. This will be determined by what benefits are important to you and whether one particular plan offers the particular benefits you are looking for.

Cost

Your premium will vary upon the extent of benefit coverage on the plan, the life time maximums you decide on, the type of plan you choose, whether it is a HMO, PPO or indemnity plan. Obviously if you want the lowest insurance premium cost then an HMO with a high co-payment would be best. If you are more concerned about the selection process than price then a PPO plan with a deductible in the range of $550 might be best. If cost is absolutely not an issue and you want as much freedom as possible on your health plan then chose a traditional indemnity plan.

The web sites below provide further insurance information:

The Health Insurance Association of America
It is the nation's most prominent trade association representing the private health care system. Its 290 members provide health, long-term care, dental, disability, and supplemental coverage to more than 123 million Americans.
US News Online Rates HMO's ~ Whether you're choosing a new managed-care option or wondering how your current HMO ranks, our 1999 guide to America's best plans can help.
US News Online Rates HMO's
Whether you're choosing a new managed-care option or wondering how your current HMO ranks, our 1999 guide to America's best plans can help.
eHealthInsurance.com
This is a website that offers online applications for major medical insurance from a choice of leading companies.