Types of Health Insurance

When considering buying health insurance it is important to know the various types that are available. These types are: (i) managed care (ii) fee-for-service plans (iii) health maintenance organizations (iv) point-of-service plans (v) preferred provider organizations. We will now discuss them individually.

Managed Care

Managed Care is a predetermined limitation on your use of the insurance you buy. This is seen as necessary by most insurance companies to control costs and the majority of plans available will have some stipulation of this sort. For example, you may not have the luxury of going to any hospital, or private doctor, of your choosing, at the expense of the insurance company. Additionally, quite often you must have their approval, prior to a stint in the hospital, if you intend to have them cover the associated expenses of your stay. These are examples of the use of managed care in your health insurance policy.

Fee for Service Plans

This refers to the concept that usually comes to mind when you think of health insurance. You pay your monthly premiums and receive a predetermined level of coverage determined by your individual plan. Generally, there are no limits on which health providers to use, however, you may be required to pay part of the expense. You pay, in the form of a deductible, your expense up to a certain amount for the year, after which your insurance should cover, a predetermined percentage (perhaps 80 %) of the rest. In addition, there is usually another upper limit after which your insurance covers all expenses under the plan.

Health Maintenance Organizations

These are a set, organized pool of medical practitioners, and healthcare providers, whose services are provided to you (for little or no cost) upon membership a plan. As usual, you are required to pay a monthly premium. The main disadvantage, in this case, is that you are "tied down" to a single network of providers (except in emergencies). This may be outweighed, however, by the benefits associated with this set-up, mainly ease of use due to the lack of claim forms.

Point of Service Plans

These are often offered under the HMO detailed above, and allow you the freedom of going outside the usual enclosed network. Doing so upon referral, by the doctor in the plan, will usually result in your fees being covered in full. If you opt to go to a specialist outside, however, you will be required to absorb some percentage of the associated costs.

Preferred Provider Organizations

This is a sort of cross between HMO and Fee for service based plans in that there is some limitation on the practitioners you can see (and have your costs borne by insurance). You will likely choose a doctor that will keep track of your condition and see to your overall health – minimizing the chance of you needing to seek healthcare outside the plan. If you so desire, however, you may use an outside practitioner and still save some money or your medical bills. As with the other types, a monthly premium is usually paid.