The Center For Debt Management
Debt Relief

Debt Consultation

Debt Settlement

Debt Consolidation

Debt Management

Credit Counseling

Filing Bankruptcy

Budget Software

Tax Debt Relief

Student Debt

Business Debt

Stop Foreclosure

Credit Report

Legal Resources

Credit and Financing

Financial Resources

Income Resources

US Tax Center

Insurance Center


Financial Library

Financial Bookstore


If You Have Found Our Site Helpful Bookmark Us Now And Be Sure To Come Back Often!


If You Have Your Own Website, We Would Appreciate You Linking To Our Website.

 

Choosing and Using A Health Plan

Contents


Changes and Choices

Health care in America is changing rapidly. Twenty-five years ago, most people in the United States had indemnity insurance coverage. A person with indemnity insurance could go to any doctor, hospital, or other provider (which would bill for each service given), and the insurance and the patient would each pay part of the bill.

But today, more than half of all Americans who have health insurance are enrolled in some kind of managed care plan, an organized way of both providing services and paying for them. Different types of managed care plans work differently and include preferred provider organizations (PPOs), health maintenance organizations (HMOs), and point-of-service (POS) plans.

You've probably heard these terms before. But what do they mean, and what are the differences between them? And what do these differences mean to you?

Return to Contents


Overview

This article can help you make sense of your choices for getting health care insurance:

  • See the questions and answers on important things you should know when "Choosing a Plan."

  • To get the most out of the plan you choose, see the tips in the section "Using Care."

Even if you don't get to choose the health plan yourself (for example, your employer may select the plan for your company), you still need to understand what kind of protection your health plan provides and what you will need to do to get the health care that you and your family need.

The more you learn, the more easily you'll be able to decide what fits your personal needs and budget.

Return to Contents


Choosing A Plan

1. What Are My Health Plan Choices?

Choosing between health plans is not as easy as it once was. Although there is no one "best" plan, there are some plans that will be better than others for you and your family's health needs. Plans differ, both in how much you have to pay and how easy it is to get the services you need. Although no plan will pay for all the costs associated with your medical care, some plans will cover more than others.

Almost all plans today have ways to reduce unnecessary use of health care—and keep down the costs of health care, too. This may affect how easily you get the care you want, but should not affect how easily you get the care you need.

Plans change from year to year, so you should carefully consider each plan, using the questions outlined in this booklet. If you get health insurance where you work, you should start with your employee benefits office. Its staff should be able to tell you what is covered under the plans available. You can also call plans directly to ask questions.

Health insurance plans are usually described as either indemnity (fee-for-service) or managed care. These types of plans differ in important ways that are described below. With any health plan, however, there is a basic premium, which is how much you or your employer pay, usually monthly, to buy health insurance coverage. In addition, there are often other payments you must make, which will vary by plan. In considering any plan, you should try to figure out its total cost to you and your family, especially if someone in the family has a chronic or serious health condition.

Indemnity and managed care plans differ in their basic approach. Put broadly, the major differences concern choice of providers, out-of-pocket costs for covered services, and how bills are paid. Usually, indemnity plans offer more choice of doctors (including specialists, such as cardiologists and surgeons), hospitals, and other health care providers than managed care plans. Indemnity plans pay their share of the costs of a service only after they receive a bill.

Managed care plans have agreements with certain doctors, hospitals, and health care providers to give a range of services to plan members at reduced cost. In general, you will have less paperwork and lower out-of-pocket costs if you select a managed care type plan and a broader choice of health care providers if you select an indemnity-type plan.

Over time, the distinctions between these kinds of plans have begun to blur as health plans compete for your business. Some indemnity plans offer managed care-type options, and some managed care plans offer members the opportunity to use providers who are "outside" the plan. This makes it even more important for you to understand how your health plan works.

Besides indemnity plans, there are basically three types of managed care plans: PPOs, HMOs, and POS plans.

Indemnity Plan

With an indemnity plan (sometimes called fee-for-service), you can use any medical provider (such as a doctor and hospital). You or they send the bill to the insurance company, which pays part of it. Usually, you have a deductible—such as $200—to pay each year before the insurer starts paying.

Once you meet the deductible, most indemnity plans pay a percentage of what they consider the "Usual and Customary" charge for covered services. The insurer generally pays 80 percent of the Usual and Customary costs and you pay the other 20 percent, which is known as coinsurance. If the provider charges more than the Usual and Customary rates, you will have to pay both the coinsurance and the difference.

The plan will pay for charges for medical tests and prescriptions as well as from doctors and hospitals. It may not pay for some preventive care, like checkups.

Managed Care

Preferred Provider Organization (PPO). A PPO is a form of managed care closest to an indemnity plan. A PPO has arrangements with doctors, hospitals, and other providers of care who have agreed to accept lower fees from the insurer for their services. As a result, your cost sharing should be lower than if you go outside the network. In addition to the PPO doctors making referrals, plan members can refer themselves to other doctors, including ones outside the plan.

If you go to a doctor within the PPO network, you will pay a copayment (a set amount you pay for certain services—say $10 for a doctor or $5 for a prescription). Your coinsurance will be based on lower charges for PPO members.

If you choose to go outside the network, you will have to meet the deductible and pay coinsurance based on higher charges. In addition, you may have to pay the difference between what the provider charges and what the plan will pay.

Health Maintenance Organization (HMO). HMOs are the oldest form of managed care plan. HMOs offer members a range of health benefits, including preventive care, for a set monthly fee. There are many kinds of HMOs. If doctors are employees of the health plan and you visit them at central medical offices or clinics, it is a staff or group model HMO. Other HMOs contract with physician groups or individual doctors who have private offices. These are called individual practice associations (IPAs) or networks.

HMOs will give you a list of doctors from which to choose a primary care doctor. This doctor coordinates your care, which means that generally you must contact him or her to be referred to a specialist.

With some HMOs, you will pay nothing when you visit doctors. With other HMOs there may be a copayment, like $5 or $10, for various services.

If you belong to an HMO, the plan only covers the cost of charges for doctors in that HMO. If you go outside the HMO, you will pay the bill. This is not the case with point-of-service plans.

Point-of-Service (POS) Plan. 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.


Primary Care Doctors

Your primary care doctor will serve as your regular doctor, managing your care and working with you to make most of the medical decisions about your care as a patient. In many plans, care by specialists is only paid for if your are referred by your primary care doctor.

An HMO or a POS plan will provide you with a list of doctors from which you will choose your primary care doctor (usually a family physician, internists, obstetrician-gynecologist, or pedicatrician). This could mean you might have to choose a new primary care doctor if your current one does not belong to the plan.

PPOs allow members to use primary care doctors outside the PPO network (at a higher cost). Indemnity plans allow any doctor to be used.

Return to Contents


2. Where Do I Get These Health Plans?

Group Policies

You may be able to get group health coverage—either indemnity or managed care—through your job or the job of a family member.

Many employers allow you to join or change health plans once a year during open enrollment. But once you choose a plan, you must keep it for a year. Discuss choices and limits with your employee benefits office.

Individual Policies

If you are self-employed or if your company does not offer group policies, you may need to buy individual health insurance. Individual policies cost more than group policies.

Some organizations—such as unions, professional associations, or social or civic groups—offer health plans for members. You may want to talk to an insurance broker, who can tell you more about the indemnity and managed care plans that are available for individuals. Some States also provide insurance for very small groups or the self-employed.

Medicare

Americans age 65 or older and people with certain disabilities can be covered under Medicare, a Federal health insurance program.

In many parts of the country, people covered under Medicare now have a choice between managed care and indemnity plans. They also can switch their plans for any reason. However, they must officially tell the plan or the local Social Security Office, and the change may not take effect for up to 30 days. Call your local Social Security office or the State office on aging to find out what is available in your area.

Medicaid

Medicaid covers some low-income people (especially children and pregnant women), and disabled people. Medicaid is a joint Federal-State health insurance program that is run by the States.

In some cases, States require people covered under Medicaid to join managed care plans. Insurance plans and State regulations differ, so check with your State Medicaid office to learn more.


Pre-Existing Conditions

A pre-existing condition is a medical condition diagnosed or treated before joining a new plan. In the past, health care given for a pre-existing condition often has not been covered for someone who joins a new plan until after a waiting period. However, a new law—called the Health Insurance Portability and Accountability Act—changes the rules.

Under the law, most of which goes into effect on July 1, 1997, a pre-existing condition will be covered without a waiting period when you join a new group plan if you have been insured the previous 12 months. This means that if you remain insured for 12 months or more, you will be able to go from one job to another, and your pre-existing condition will be covered—without additional waiting periods—even if you have a chronic illness.

If you have a pre-existing condition and have not been insured the previous 12 months before joining a new plan, the longest you will have to wait before you are covered for that condition is 12 months.

To find out how this new law affects you, check with either your employer benefits office or your health plan.

Click Here To Continue ...

Deep In Debt?  —  Call 1800 DEBT.COM  —  Get Help Today!


 
Over 2,000 Pages of Content

DEEP IN DEBT?

• Avoid Filing For Bankruptcy

• Reduce Your Debt Up To 60%

• No Credit Checks To Qualify

• No Home Ownership Required

• Be Debt Free In 12 to 36 Months

• Personalized & Flexible Programs

• Your Path To Living Debt Free


CALL RIGHT NOW!

1800DEBT.COM

(That's 1800-332-8266)

For a No Obligation Confidential
FREE DEBT CONSULTATION


A Professional Debt Counselor Is Standing By and Waiting For Your Phone Call This Very Moment

CALL NOW!
1800DEBT.COM

Or, Click Here To Apply Online
and For Other Debt Relief Options

The Internet's Largest Selection

Do-It-Yourself
Legal Software

Low Cost Legal
Forms & Agreements

Over 10,000 Forms Are Available To Download

• Attorney Prepared Legal Forms

• No Waiting! — Download Online

• No Attorney or Paralegal Required

• Document Preparation Is Available

• Your Satisfication is Guaranteed

• Save Thousands $$$ In Legal Fees


For Standard Legal
Do-It-Yourself
Forms Software
Click Here

To Search From
Over 10,000 Legal
Forms & Agreements
Click Here

SETTLE YOUR DEBT
FOR LESS!

• Avoid Filing For Bankruptcy

• Reduce Your Debt Up To 60%

• No Credit Checks To Qualify

• No Home Ownership Required

• Be Debt Free In 12 to 36 Months

• Effective Debt Settlement Plans

• Your Path To Living Debt Free


CALL RIGHT NOW!

1800DEBT.COM

(That's 1800-332-8266)

For a No Obligation Confidential
FREE DEBT CONSULTATION


A Professional Debt Counselor Is Standing By and Waiting For Your Phone Call This Very Moment

CALL NOW!
1800DEBT.COM

Or, Click Here To Apply Online
and For Other Debt Relief Options

Center For Debt Management

Center For Debt Management

The Center For Debt Management

Helping Consumers Save Money and Reduce Debt Is Our Only Business!

We invite you to explore the sectors listed below. We promise that you'll find exceptional values, offers and resources to reduce your living expenses and to enjoy life! But First—if you're over-your-head in debt—get a free no-obligation debt consultation right now!
 


Debt Management and Financial Services! The Internet's oldest and most comprehensive debt management agency! Resources for debt management, consumer credit counseling, debt consolidation loans, debt settlements, legal aid, financial aid, credit and financing, credit reports, budget software, insurance, income resources, tax assistance and more. Get out of Debt! Call Now — 1800DEBT.COM

Established In 1989 and Serving The Online Community Since 1992!

Get Out Of Debt: Call 1800Debt.com

Center For Debt Management