Are you searching for different health insurance plans? With so many different types of health insurance and companies available, the search can get overwhelming. The best way to get started is to figure out what health insurance plan works best for your current and future situation. So let's get down to the nitty-gritty!
The health insurance plans provided by insurance companies are largely categorized into two:
- 1. Indemnity Plan: A type of health insurance that reimburses the policyholder for their medical expenses. The policyholder chooses where they receive care, and their health insurance provider covers a portion of the costs up to the limit of their coverage. This type of health plan provides flexibility as it allows the policyholder to choose from a variety of healthcare providers, such as doctors, hospitals, specialists, and laboratories regardless of whether or not they are in-network. Indemnity plans can also provide more comprehensive coverage than other types of plans because they cover both preventative care and unexpected medical costs like surgery and hospitalization.
- 2. Managed Care Plans: A type of health insurance that utilizes a coordinated system for providing healthcare services. This type of insurance includes Health Maintenance Organizations (HMOs), Preferred Provider Organizations (PPOs), and Point-of-Service (POS) plans. The plan is managed by an insurer who contracts with specific hospitals, doctors, clinics and other health care providers, as well as negotiates rates for various services. These plans typically focus on preventive care and require policyholders to select a primary care provider who coordinates all the medical care. Managed care plans can also offer cost savings to the policyholder in exchange for taking greater responsibility in choosing providers in their network.
What's The Difference Between An Indemnity Plan And Managed Care Plan?
An indemnity plan allows for the reimbursement of incurred medical expenses for insured persons. If you opt for an indemnity plan, you can seek our medical services from any medical provider of your choosing. You will be reimbursed by your health insurance provider, but typically, the reimbursement is limited and will not cover your costs in full.
Managed care plans, on the other hand, are insurance policies that seek to integrate the provision of health care services and financing. Under this plan, organizations collaborate with healthcare service providers. The organizations help the service providers to reach and attract the patients who need their services in exchange for discounts for members.
In short, the primary difference between an indemnity plan and a managed care plan is the level of control over medical costs. An indemnity plan allows the policyholder to choose their own healthcare provider, while a managed care plan requires that policyholders use approved providers within their network. Indemnity plans typically provide more coverage options than managed care plans and do not require referrals from a primary care physician. On the other hand, managed care plans focus on providing preventative care and often offer cost savings in exchange for fewer choices of providers. Ultimately, it is up to the individual to decide which type of health insurance is best suited for their needs.
Comparing Indemnity And Managed Care Plans
- An indemnity plan has limited reimbursement. When a person purchases health care insurance under the indemnity plan, you will receive reimbursement for his or her medical expenses for up to a specified number of days. Under the PPO plan, however, persons who have taken this policy will receive reimbursement for all their medical expenses from specified service providers.
- These plans exist in three main categories: Preferred Provider Organizations (PPO), Health Maintenance Organizations (HMO), and Point of Service (POS). The three categories have various similarities and differences. The indemnity plan has only one category. This limits the options available to clients who have health insurance under this plan. With these plans, clients can choose between the three options based on their preferences.
- The managed care plans involve a prearranged collaboration between an insurer and a medical service provider. Clients enjoy the various options under this plan and enjoy prearranged agreements between insurers and various providers of healthcare services. The areas where holders of such a policy can seek medical services are specified in the agreement. The indemnity plan, however, does not involve tying an insured person to a specific medical service provider. This makes it flexible as insured persons can seek medication from facilities of their own choice.
- Under the indemnity plan, there are no set criteria for selecting a medical service provider from which an insured person can access medication. This is different from the managed plan because it has set standards that service providers should meet before being contracted. The set standards are geared towards guaranteeing quality care for insurance policyholders.
Types of Managed Care Plans
These plans exist in three categories that include Health Maintenance Organizations (HMO), Preferred Provider Organizations (PPO), and Point of Service (POS).
1. Health Maintenance Organizations
The common features of Health Maintenance Organizations (HMO) plans are:
- Provision of medical services on a prepaid basis
- Persons under the plan pay a fixed monthly fee regardless of their monthly medical expenses
- HMO members are required to seek medical services from physicians and facilities under the HMO network.
2. Preferred Provider Organizations
Common features of the PPO plans are:
- They comprise health facilities and personnel that provide medical services to a specific group of people.
- PPO members are required to pay for the services they get from their own finances.
- Costs of the services under this plan are negotiated earlier between healthcare service providers and the sponsors of PPOs.
3. Point of Service
Some of the features of the Point of Service plans are:
- Insurance cover holders of this plan do not pay for deductibles and incur minimum co-payment when they use services from a service provider within their network.
- Under this plan, you will be required to choose a primary healthcare expert responsible for all your referrals within the POS network.
- Those who seek medical services outside their POS network are subjected to a deductible. The deductible can range from $300 and above for individuals and $600 and above for families.
- About 30% of the co-payment goes to offset the physician’s charges.
Indemnity Plan vs Managed Care Plans
Deciding which type of plan is better for you, an indemnity plan or a managed care plan, depends on your individual healthcare needs. If you are looking for more flexibility and choice in terms of which doctor you see, then an indemnity plan may be the way to go. However, if cost savings are important to you, then a managed care plan could provide lower premiums and out-of-pocket expenses. In addition, certain health concerns or chronic conditions may necessitate specific treatments or specialists that may not be covered by an indemnity plan but would likely be covered by a managed care plan. Ultimately, it is important to consider all aspects of each type of insurance policy when making your decision. Be sure to enter your zip code and find the best health insurance for you on FirstQuote Health!