Basic Types of Insurance Coverages
Managed Care:
Patients are encouraged to stay within the plan’s network of providers and healthcare facilities.Two types of Managed Care plans are:-
- Health Maintenance Organization (HMO):
A primary care provider is designated. This provider may act as a gatekeeper managing the course of your healthcare treatment.
HMO patients are required to see in-network providers, and use in-network healthcare facilities (except in cases of emergency). - For Example:
- Ali is covered under an HMO plan. His parents pay the insurance premium.
- Ali must select a primary care provider (PCP) from the HMO’s list who will direct all of Ali`s health care.
- Ali has a bad knee injury and wants to see a special orthopedic doctor. First, he may need to see his PCP. If the PCP cannot help Ali, he will write a referral to the specialist and may need to schedule the appointment for Ali.
- Summary:
- No deductible in-network
- Small co-pay fees in-network
- Access to care is directed by the primary care provider.
- Pre-authorization from the HMO may be needed in some situations.
- In general, no claim forms need to be filed.
In network provider: A healthcare provider or facility that has a contract with the insurance company
CO-Pay: A fixed amount the subscriber pays at the time of service.
- Preferred Provider Organization (PPO):
PPO plans give the patient more flexibility. The patient can see any doctor in the network without getting approval. This includes specialists. The PPO patient is able to seek care outside of the network, but the insurance benefit is reduced, and the out-of-pocket expense increases. Refer to individual policies for details - For Example:
- Sana works at a company that provides PPO health insurance. Her company pays the insurance premium.
- Sana can select any doctor she wants to see as long as they are in-network providers. (No claim forms are needed for in-network providers.)
- Sana does not have to get prior approval to seek health care from an in-network specialist.
- Sana pays a co-pay with each visit. The co-pay may be different for specialists, pharmacies, and hospitals.
- Summary:
- Reasonable co-pays
- Ability to select the provider
- In-network, no claim forms
- Ability to go out-of-network for extra ‘out-of- pocket’ fees and decreased benefit
- Out-of-network claim forms must be filed with the PPO plan.
Out of network provider: A healthcare provider or facility that does not have a contract with the insurance company.
2. Fee-For-Service/Indemnity Plans
Private indemnity or “fee-for-service” insurance can be obtained by individuals on their own, or through groups, such as employers or associations. These plans generally offer the freedom to choose your own healthcare providers including specialists and hospitals.The medical costs are split between the insurance company and the subscriber. Each pays a fixed percentage of the medical costs. These plans have set maximum “out-of-pocket expenses” the subscriber will have to pay.
- For Example:
- Shahid is no longer covered on his parents’ health insurance plan. He purchases an indemnity plan.
- He has to pay the insurance premium (cost of the policy).
- He will be responsible to pay a deductible fee that will be applied to his healthcare cost before the insurance will begin to pay. He will also be responsible to pay a percentage of the medical costs (coinsurance) up to a set limit.
- He is able to select his own healthcare provider.
- He does not need referrals to see a specialist.
- Summary:
- Deductible fee applies
- Patient is responsible for a percentage of medical costs.
- Patient can see any provider or use any medical facility they choose.
- Higher out-of-pocket expenses
- Patient may need to fill out claim forms.
Out of pocket expense:Medical costs which the subscriber is responsible for. These are in addition to the cost of the premium. They are charges the insurance will not cover (e.g., deductible, co-pays, etc.).