Comparision of Medical Insurance Plans

A Insurance Article Contributed by Deepak Cutting

Types of Medical Insurance Plans

There are basically three types of managed medical insurance plans:

* Health Maintenance Organization(HMO) plans: These medical insurance plans are designed to be with the lowest cost. They require that the insured person receive medical attention through only their own service providers, unless in emergency or if the requisite service is not available within the network. In this plan you choose a 'primary care physician' from the panel of Doctors available with the insurers.

This Doctor then fulfills the role of your 'family Doctor', entrusted with providing solutions to your medical problems. He will supervise the medical attention that you receive and refer you to specialists, whenever required. Basically, the primary care physician is responsible for providing medical care to the policyholder under this plan. Medical care from outside the network is taken only in exceptional circumstances.

However, access to the best available medical care is also provided with some additional payments, should the circumstances require. This service is generally restricted to a geographical area or state, with limited benefits available outside this area while traveling. Since service is usually being provided within the network, claims are not necessary to be filed.

Under this scheme the usual remuneration to the primary care Doctor by the insurance provider is a retainer fee, payable per person for a fixed time period, and not per visit.

* Point of Service(POS) medical insurance plans: The 'primary care physician' also oversees this service but the choice of service outside the provider's network is also available. Within the network, the scheme works like the HMO plan and outside the network it works like the 'free for service' plan. When availing facilities outside the network, the share of the cost of service to be paid by the insured person is greater.

For certain medical treatment requirement the Point of Service plan may prohibit service from outside the network altogether. An existing HMO policy could be provided the additional benefit of the POS policy, at an extra cost. This plan is usually applicable in a geographically restricted area such as one state, but limited benefits are available throughout the country when ravelling. For claims, when service is rendered within the network, no claim is to be filed.

For service obtained outside the network, the policyholder makes payment and claims the reimbursable portion from the insurance company.

* Preferred Provider Organization(PPO): These plans offer the widest choice among the 'managed care' medical insurance plans. You may choose your Doctor but if you prefer to go to a Doctor within the network then the deductibles and co-insurance is much lower. You are not required to nominate a primary care physician and the insurers pay the Doctor not at a flat rate but an agreed upon rate. This service can be availed of throughout the U.S.A. For service obtained outside the network, the policyholder makes payment and claims the reimbursable portion from the insurance company.

Payments with a 'managed' Medical Insurance

The payments to be made under this type of medical insurance plans are:

* Premium,

* Deductibles and

* Co-payments: This is that percentage of cost of service that the insured person agrees to bear, in lieu of a induced premium. Most policies prescribe a certain maximum out-of-pocket charge, which is the sum of deductibles and co-payments to be paid by the policyholder within a certain period. Once that ceiling is reached, the insurance provider will bear all expenses.

*Co-insurance: This is the share of the claim payable by the policyholder, after deduction of all deductibles. This is usually applicable to out of network payments in PPO and POS plans, thereby providing incentive to the policyholder to remain within the network.

Cost of Medical Insurance

The 'free for service' plan generally has the highest premium, followed by the 'PPO', which is followed by the 'POS' plan. The 'HMO' plans are generally the cheapest.