Health care in America is changing rapidly. Twenty years ago, most people in
United States had idemnity coverage, which meant insured person could go to any doctor, hospital or health care provider (which would bill for each service given), and insurance company and patient would each pay a portion of bill.Today, however, more than half of all Americans who have health insurance are enrolled in some kind of managed care plan, an organized method of both providing services and paying for them. Different types of managed care plans work differently and include preferred provider organizations (PPOs), health maintenance organizations (HMOs), and point-of-service (POS) plans.
You may have heard of these terms before. But what do they mean, and what are differences between them? More importantly, what do these differences mean to you? Even if you don't get to choose your health plan yourself (for example, your employer may select plan for your company), you still need to understand type of protection your health plan provides and what your must do to get health care that you and your family really need.
Choosing between health plans is not as easy as it once was. And although there is not one "best" plan, there are some plans that will be better for you and your family's health needs. Plan differ in how much you have to pay and how easy it is to get services you need. No plan will pay for all costs associated with your medical care. However, some plans will cover more than others.
Health insurance plans are usually described as either indemnity (fee-for-service) or managed care With any health plan, however, there is a basic premium, which is how much your or your employer pay, usually monthly, to buy health insurance coverage. In addition, there are often other payments you must make, which will vary by plan. In considering any plan, you should try to figure out its total cost to you and your family, especially if someone in family has a chronic or serious health condition.
With an indemnity plan you can use any medical provider (such as a doctor and hospital). You, or they, send bill to insurance company, which pays part of it. Usually you have a deductibel--such as $500--to pay each year before insurer starts paying.
Once you meet deductible, most indemnity plans pay a percentage of what they consider "Usual and Customary" charge for covered services. The insurance company generally pays 80 percent of Usual and Customary costs and you pay other 20 percent, which is known as co-insurance. If health care provider charges more than Usual and Customary rates, you will have to pay both co-insurance and difference.
