| Fee-for-Service
Plans
This is
the traditional kind of health care policy. Insurance companies
pay fees for the services provided to the insured people covered
by the policy. This type of health insurance offers the most
choices of doctors and hospitals. You can choose any doctor
you wish and change doctors any time. You can go to any hospital
in any part of the country.
With fee-for-service,
the insurer only pays for part of your doctor and hospital
bills. You pay a monthly fee, called a premium.
A certain
amount of money each year, known as the deductible, is paid
for by you before the insurance payments begin. In a typical
plan, the deductible might be $250 for each person in your
family, with a family deductible of $500 when at least two
people in the family have reached the individual deductible.
The deductible requirement applies each year of the policy.
Also, not all health expenses you have count toward your deductible.
Only those covered by the policy do. You need to check the
insurance policy to find out which ones are covered.
After
you have paid your deductible amount for the year, you share
the bill with the insurance company. For example, you might
pay 20 percent while the insurer pays 80 percent. Your portion
is called "coinsurance".
To receive
payment for fee-for-service claims, you may have to fill out
forms and send them to your insurer. Sometimes your doctor's
office will do this for you. You also need to keep receipts
for drugs and other medical costs. You are responsible for
keeping track of your own medical expenses.
There
are limits as to how much an insurance company will pay for
your claim if both you and your spouse file for it under two
different group insurance plans. A coordination of benefit
clause usually limits benefits under two plans to no more
than 100 percent of the claim.
Most fee-for-service
plans have a "cap," the most you will have to pay for medical
bills in any one year. You reach the cap when your out-of-pocket
expenses (for your deductible and your coInsurance) total
a certain amount. It may be as low as $1,000 or as high as
$5,000. The insurance company then pays the full amount in
excess of the cap for the items your policy says it will cover.
The cap does not include what you pay for your monthly premium.
Some services
are limited or not covered at all. You need to check on preventive
health care coverage such as immunizations and well-child
care.
There
are two kinds of fee-for-service coverage: basic and major
medical. Basic protection pays toward the costs of
a hospital room and care while you are in the hospital. It
covers some hospital services and supplies, such as x-rays
and prescribed medicine. Basic coverage also pays toward the
cost of surgery, whether it is performed in or out of the
hospital, and for some doctor visits. Major medical
insurance takes over where your basic coverage leaves
off. It covers the cost of long, high-cost illnesses or injuries.
Some policies
combine basic and major medical insurance coverage into one
plan. This is sometimes called a "comprehensive plan." Check
your policy to make sure you have both kinds of protection.
Health
Maintenance Organizations (HMOs)
Health
maintenance organizations are prepaid health plans. As an
HMO member, you pay a monthly premium. In exchange, the HMO
provides comprehensive care for you and your family, including
doctors' visits, hospital stays, emergency care, surgery,
laboratory (lab) tests, x-rays, and therapy.
The HMO
arranges for this care either directly in its own group practice
and/or through doctors and other health care professionals
under contract. Usually, your choices of doctors and hospitals
are limited to those that have agreements with the HMO to
provide care. However, exceptions are made in emergencies
or when medically necessary.
There
may be a small co-payment for each office visit, such as $5
for a doctor's visit or $25 for hospital emergency room treatment.
Your total medical costs will likely be lower and more predictable
in an HMO than with fee-for-service health insurance.
Because
HMOs receive a fixed fee for your covered medical care, it
is in their interest to make sure you get basic health care
for problems before they become serious. HMOs typically provide
preventive care, such as office visits, immunizations, well-baby
checkups, mammograms, and physicals. The range of services
covered varies in HMOs, so it is important to compare available
plans. Some services, such as outpatient mental health care,
often are provided only on a limited basis.
Many people
like HMOs because they do not require claim forms for office
visits or hospital stays. Instead, members present a card,
like a credit card, at the doctor's office or hospital. However,
in an HMO you may have to wait longer for an appointment than
you would with a fee-for-service health insurance plan.
In some
HMOs, doctors are salaried and they all have offices in an
HMO building at one or more locations in your community as
part of a prepaid group practice. In others, independent groups
of doctors contract with the HMO to take care of patients.
These are called individual practice associations (IPAs) and
they are made up of private physicians in private offices
who agree to care for HMO members. You select a doctor from
a list of participating physicians that make up the IPA network.
If you are thinking of switching into an IPA-type of HMO,
ask your doctor if he or she participates in the plan.
In almost
all HMOs, you either are assigned or you choose one doctor
to serve as your primary care doctor. This doctor monitors
your health and provides most of your medical care, referring
you to specialists and other health care professionals as
needed. You usually cannot see a specialist without a referral
from your primary care doctor who is expected to manage the
care you receive. This is one way that HMOs can limit your
choice.
Before
choosing an HMO, it is a good idea to talk to people you know
who are enrolled in the one you are considering. Ask them
how they like the services and care given.
Point-of-Service
Plans (POS)
Many HMOs
offer an indemnity-type option known as a POS plan. The primary
care doctors in a POS plan usually make referrals to other
providers in the plan. But in a POS plan, members can refer
themselves outside the plan and still get some coverage.
If the
doctor makes a referral out of the network, the plan pays
all or most of the bill. If you refer yourself to a provider
outside the network and the service is covered by the plan,
you will have to pay coinsurance.
Preferred
Provider Organizations (PPOs)
The preferred
provider organization is a combination of traditional fee-for-service
and an HMO. Like an HMO, there are a limited number of doctors
and hospitals to choose from. When you use those providers
(sometimes called "preferred" providers, other times called
"network" providers), most of your medical bills are covered.
When you
go to doctors in the PPO, you present a card and do not have
to fill out forms. Usually there is a small co-payment for
each visit. For some services, you may have to pay a deductible
and coinsurance.
As with
an HMO, a PPO requires that you choose a primary care doctor
to monitor your health care. Most PPOs cover preventive care.
This usually includes visits to the doctor, well-baby care,
immunizations, and mammograms.
In a PPO,
you can use doctors who are not part of the plan and still
receive some coverage. At these times, you will pay a larger
portion of the bill yourself (and also fill out the claims
forms). Some people like this option because even if their
doctor is not a part of the network, it means they do not
have to change doctors to join a PPO.
 
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