By: Thomas J. Hartfield
Health Insurance Explained
Healthcare has changed since the days of family doctors and house calls. Today the rising cost of everything from prescription drugs to diagnostic treatments has us turning to managed care networks for workable health care solutions. Times may have changed, but there are still a number of good alternative insurance options to consider. Health plans can be broken down into four basic categories, HMOs, POSs, PPOs and Fee-for-Service (Indemnity) Plans.
The Four Basic Health Plans
Health Maintenance Organizations: By choosing an HMO Plan, you’ll be paying for your coverage in advance, rather than paying for each health related service separately. For the price of a monthly premium, your HMO will offer you a range of benefits from preventative care to dental or vision coverage. When it comes to your doctors, more often than not they will be employees of your health plan. You will need to choose what’s known as a “primary care giver,” who will be responsible for coordinating your care—your HMO will provide you with a list of providers. The majority of HMO plans require a co-payment for an office visit, a hospital stay, or specialist health service.
Point of Service Plans: POS plans are HMO’s that allow you to control your own health care, rather than insisting on referrals from your primary care physician. Whenever you have a medical need, you’ll have three “point of service” choices. Go through your primary care physician, and receive coverage under HMO guidelines. Get your care through a PPO provider and receive coverage under PPO’s in-network rules. Choose the services of a healthcare professional outside of the HMO or PPO networks, and receive coverage under out-of-network rules.
Preferred Provider Organizations: Your PPO Plan negotiates lower overall fee arrangements with an assortment of doctors, hospitals, clinics, and other health providers. Your cost-sharing rate will be lower in-network than out, but you still have the freedom to step out of the network for treatment if you prefer. For example . . . Your PPO may cover 90% of costs when you receive care from an in-network provider. If you decide to see an out-of-network care provider, your PPO might only reimburse you for 70% percent of your costs. You may also have to cover any difference between what the physician charges and your PPO’s negotiated fees.
Fee-for-Service Plans (Indemnity): These traditional plans are as simple as they sound. Your Fee-for-Service plan reimburses medical providers for each service you receive on a case by case basis. For example, if you’ve had to have and an emergency-room x-ray, the hospital will submit a claim to your insurance carrier, who then pays the hospital’s fee. Your Fee-for-Service plan requires you to pay an annual deductible before it begins to reimburse you for covered services. It also gives your family the freedom to seek whichever doctors, hospitals and clinics you prefer.
HMOs and Fee-for-Service Plans are on opposite sides of your health insurance spectrum, while POS and PPO plans fall somewhere in between them. HMO’s offer the least freedom, followed in order by the POS, the PPO and Fee-for-Service plans. Cost-wise, an HMO is usually the least expensive option, followed by POS plans, PPO plans and finally Fee-for-Service Plans.
Thomas J. Hartfield, President and founder of Hartfield Financial & Insurance Services, Inc., launched his independent Insurance Planning and Financial Services practice in 1994 to help individual savers and investors with Health, Life and Disability Insurance to get the best plan at the most completive rates. Visit us at: www.HartfieldInsurance.com for online competitive health insurance quotes or to simply learn more. We can be reached at: 805/522-5815. "HELPING FAMILIES PRESERVE THEIR WEALTH"