Types of Health Insurance Plans

The health insurance plans can be classified into three broad categories:
1. Conventional health insurance plan: This policy mainly covers medical, dental, surgical, comprehensive and natural calamities. Premium depends on the area of coverage, requirement for individual or family. Term of coverage and policy chosen by your employer The companies providing Conventional health insurance plan type of insurance included Blue Cross, blue shield and commercial insurance companies and few independent insurance providers also offer such plans. These plans are also called indemnity plans or fee for service plan. Under this plan insured persons can contact any provider to address his medical or health problems. In most cases the provider will directly send circumstances you have to pay for service from your own pocket and submit claim with insurance company.

Under this category of plan, insured has to pay a regular fee called premium till he wants to remain covered. If policy is taken through employer, the premium is deducted directly from paycheck of the employee. In addition to premium, deductibles are to be paid be the insured, before the insurance company commences payment under this plan. This is to be paid every year. If deductibles are higher, premium will be low. After payment of deductibles, cost of medical and health services are to be shared proportionally between insured and insurance company. Mostly it is in the ratio of 30-70 but some companies and policies provide 20-80 ratio. This phenomenon of mutual sharing of expenses is termed as coinsurance. Here also higher the coinsurance lower will be the premium. Most policies under this plan have the clause life-time maximum, which is financial limit which company will pay for medical services, covered under specific policy, during entire life time of the insured.

2.Prepaid Health care plan: In Prepaid Health care plan category instead of paying a premium insured has to pay a fixed monthly or quarterly fee to cover their medical and health expenses. Prepaid Health care plan is mostly provided by health maintenance organizations or preferred provider organizations. Group of medical professionals, hospitals or other health care related individuals or institutions, form a wide network to meet every medical and health related requirements of insured against a regular monthly/ quarterly fee. Sometimes, hospitals, physicians provide discount rates to insurance companies under mutual agreement under this plan. Insurance policies under this plan provides higher reimbursement, if services taken from the hospitals or physicians, who are part of the network of providers. Provider network consists of institutions, hospitals, doctors, pharmacists, registered nurse or any individual authorized under law to administer health care services. Policies under this plan are more affordable. This type of plan is also called as Managed care plan.

It can be divided into following three categories:
i)Health Maintenance Organization (HMO): Under this category the medical/ health service provider is paid a fixed monthly fee also called capitation fee for each insured person,irrespective of the cost of the service provided. Insured person can be attended by the providers available in network of the HMO. Insured has option to select a primary care physician from the list of HMO.This physician will look after allyour medical and health problems covered under the policy and if required may refer to specialists.

ii)HMO with point of service option (POS): Under this plan insured can hire the service of providers outside the network but cost will be more. This coverage is generally taken as additional to the main policy.

iii)Preferred provider organization (PPO): Under this plan insured person is free to contact any doctor/ hospital/ provider he likes. In this case selection of primary care physicians is not required. Health/ medical care is costlier if provider selected is outside network of PPO.

3.Governmental Health Plans: This is available in the form of Medicare and Medicaid. These are financed by federal government. Medicare is state subject and managed by them frothier jurisdiction. For coverage under these plans you have to contact and checkup from local authorities, whether you qualify or not. Government covers under this plan only old aged, poor and disabled people.

Item Conventional Plans
Prepaid Plans
HMO PPO POS
Choice of health care provider Yes
Restricted to network Yes but you pay less if provider is within network Yes but you pay less if provider is within network
Coverage Are Anywhere you live or travel in USA
Specific coverage inStatelimited benefits while traveling Anywhere you live or travel in USA Specific coverage in State Very limited benefits while traveling
Premium Highest among all
Lowest Lower than Lower than Conventional plan
Primary care Physician NO
Yes No Yes Within Network
Deductibles Yes
Depends on plans For outside networks Yes
Co payments Yes
Yes Yes if within network Yes within network
Coinsurance Mostly included for low premium plans
Yes Yes Often offered for low premium plans.

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