Health Insurance - The types you must know of
Everybody, whether they’re young or old, likes to be in the best of health. Ironically, good health is a rare phenomenon today. Whether it is an increased rate of disease occurrence or escalated frequency of accidents, people do have different factors to fear. And this is where the concept of health insurance creeps in. Today, health insurance products are freely available all over the world through countless providers and companies. But deciding on the right insurance policy is not as easy as it sounds. To do that one needs to know the basics of health insurance. In fact, the very first thing that a prospective policyholder must do is learn about the different types of insurance. Here’s a quick checklist for newbies and also ones who desire to know more -
Fee-for-service health insurance : The fee-for-service health insurance is the most basic kind you will come across. In this category, one pays a certain fee every time he or she visits the doctor. It is a mutual agreement by which the doctor agrees to offer services to an individual against a pre-determined fee. However, it is the individual who chooses the doctor of his preference according to his or her convenience. Either the patient or the provider files the claim for this kind of health insurance.
Managed care health insurance : This is the type of insurance that most Americans opt for today. Managed care insurance comprises three distinctive segments that aim to make health insurance not only cost-effective but also qualitatively superior. These segments comprise the Preferred Provider Organization (PPO) insurance, Health Maintenance Organization (HMO) insurance and Point of Service (POS) insurance. In a PPO plan managed care is offered by a network of hospitals and doctors that charges a lesser fee against the services they offer. Opting for services outside the given network often results in an increase in cost-sharing. PPO plans usually provide policyholders with a lot of flexibility.
The Health Maintenance Organization (HMO) form of insurance is one that has existed for decades in the managed care category. This is a pre-paid type of insurance where specialized services like preventive care are provided against a pre-determined fee. An HMO can be a Group Model or an Individual Practice Association. In the former, participating doctors are attached to the health plan in question as employees and policyholders have to visit particular medical centers to avail the services. In an Individual Practice Association HMO, practicing doctors are not from within the network and members need to visit them at their private offices.
Point of Service (POS) insurance is a part of the HMO concept. In this case, though, the procedure is different in the sense that one can have the choice to consult a doctor outside the provided network. Initially in a POS plan one has to opt for a doctor within the network and it is only after he gives a referral, can the policyholder move on to a doctor outside the circle.