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Acquainting yourself before choosing and using your own health plan

Acquainting yourself before choosing and using your own health plan

Introduction: Early on in United States indemnity insurance plan was more prevalent i.e. when a person went to a doctor or hospital the patient and the insurance provider each paid a part of the bill. This was the scenario 25 years ago. But now America is changing rapidly. More and more American people today have health insurance plans and it is more properly managed and cared in an organized way. Today insurance plan provides both services and payment of the bill.

Different types of Medicare plans include indemnity insurance plan and managed insurance plan which again have the following plans under it like:

  • Preferred provider organizations,
  • Health maintenance organization and
  • Point of service plans

We all are aware of these plans but the difference is quite unknown to common people and as such it is important to know before any decision can be taken to settle on any particular plan.

Choices of health plan

The basic difference between Indemnity insurance plan and Managed plan is that indemnity insurance plan has a lot of choice among doctors. Also they pay the part of the medical bill after they receive it in proper documents. Managed plan on the hand have prior agreements with doctors as such the choice of doctors decreases. Also the paper work is much less compared to indemnity plan.

Indemnity Plan:

For indemnity plan both the choice for hospital and doctor can be made by the client. Each year a certain amount needs to be paid before the insurance company starts paying. The bill amount is forwarded by the medical authority or the person concerned and 80 percent of it is then paid by the insurance company. But there are some usual or customary charges for the service provided. If it exceeds the usual charges then both the difference and the coinsurance that is the remaining 20 percent is paid by the client.

Managed care:

Preferred Provider Organization (PPO): PPO has arrangement with the doctors, hospitals and other providers who charge lower prices from the insurer for their service. As such the amount payable by the client also drops. A patient can be referred to doctors within the PPO plan and based on lower charges offered the coinsurance paid by you is also lower. If you decide to go to the doctors outside the PPO then higher coinsurance money is to be paid by you.

Health Maintenance Organization (HMO): HMO offers client health benefits that can be availed for a monthly fee. In this case too, doctors, medical offices and clinics are employees to the insurance agency. Physicians from both medical clinics and private practices form part of it. It is the oldest plan and offers preventive care including health benefits. While with some HMOs people have to pay nothing in case of others a co-payment of very small amount goes with it.

Point of service Plan (POS): POS is indemnity- type option where the client can chose doctors outside the referred doctors in the plan and still gets covered by the policy. But this ‘out of plan’ doctors have to be referred by the doctors who are in the plan. If the client themselves decide to go to doctors outside the plan then they have to pay certain coinsurance money.

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