Checkpoint: Features of Health Plans
There may be variations, but all insurance plans are one of two essential types; Indemnity or Managed Care (Valerius, Bayes, Newby, & Seggern, 2008). There are five health plans highlighted in this chapter; Indemnity Plans, Health Maintenance Plans (HMO’s), Point of Service Plans (POS), Preferred Provider Organization (PPO), and Consumer Driven Health Plans (CDHP) (Valerius, Bayes, Newby, & Seggern, 2008). A short description and comparison is as follows: 1. Indemnity Plans-protection against loss; under this plan, the payer indemnifies the policy holder against medical service and procedure costs. Patients choose their own providers. The physician bills the insurance company as services are given (Valerius et al., 2008). 2. Health Maintenance Organizations (HMO’s) - Premiums are prepaid and a combination of coverage of medical costs and delivery of healthcare is provided. A network is created containing physicians, hospitals, and other providers (Valerius et al., 2008). Membership enrollment is required, along with preventative care. Referrals are often needed for specialty services. 3. Point Of Service Plans (POS) – Similar to the HMO plan; specifically called an open HMO. This plan reduces restrictions, allowing members to choose providers outside of the HMO. However, a penalty fee is charged (Valerius et al., 2008). 4. Preferred Provider Organization (PPO) – This plan also manages care, but is most preferred and popular type. A network of physicians, hospitals, and other providers with whom discounts have been negotiated from the usual fees (Valerius et al., 2008). 5. Consumer-Driven Health Plans (CDHP) – Two elements are combined in this plan. One being a health plan which is normally a PPO. This plan has a higher deductible and lower premium (Valerius et al., 2008). Second is the special savings account which is used to pay medical bills before deductible is met. The account is similar to an IRA,...
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