Two Primary Choices
Essentially, there are two different types of health insurance offered. They are known as indemnity plans, which are also referred to as ‘fee-for-service' plans and managed care plans. Indemnity plans typically offer more flexibility and freedom of choice than managed care plan but at a greater ‘out-of-pocket' price. With this type of plan you can generally choose which provider, hospital, and lab your wish to use.
As long as the service you are receiving is covered by your insurance plan, they will cover the cost involved once you've settled the deductible for the year and provided you haven't exceeded your maximum coverage for the year. You should also be aware that most services will require a co-payment of some sort for services that are covered. This is typically 20% and isn't always a percentage of the actual amount that was billed. Rather, it's sometimes a percentage of the ‘usual and customary' fee for the area in which you live.
Most indemnity plans only pay for illnesses or accidents and do not cover preventative maintenance visits. You should check your policy carefully to see what sort if any of coverage is offered for these services as well as whether or not there is coverage for prescription medications or mental health services.
HMOs or managed health care tends to be a complete opposite to indemnity plans. These plans have much smaller deductibles and the co-pay fees are much lower by nature than with indemnity plans. You might also find that in many cases preventative care, prescription drugs, and mental health care are also covered.
The limits of this particular plan are that you can only choose from a select group of doctors, facilities, and other medical service providers. If you go outside the network, it is likely that your care will not be covered at all.
As a result of the fact that many people feel uncomfortable making this sort of commitment to only see approved doctors, many HMOs are offering hybridized versions of coverage that provide some features of indemnity coverage.
One solution is what is known as the point of service plan. With this plan you can still enjoy the low costs and fees associated with receiving care within the network of your HMO while enjoying the flexibility to choose care outside of your network for more substantial co-payments and a higher deductible.
There are other plans that allow you the opportunity to see a specialist without a referral provided that he or she is affiliated with the network. These plans are often referred to as open access plans. You should make sure that you carefully read all the material that is provided when selecting your plan and seek clarification on any points that are unclear before you make the decision to go with one plan over another.
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