When searching for insurance you should know that there are two different kinds of insurance, indemnity and managed care. Each of these plans has pros and cons, and the decision which one to take will depend only on your needs.
Indemnity insurance can sometimes be called fee for service. This type of insurance will give you more freedom than managed care. The big downside to indemnity insurance is that you will have to pay more for the healthcare expenses that you get. With indemnity insurance you can choose any hospital, doctor, specialist, that you wish.
If you are changing policies and already have a doctor that you like, indemnity insurance will probably be your best option, as you would get to keep your current doctor. This type of insurance usually covers all services as long as they were mentioned in your coverage statement. It may not pay the bill entirely however, and along with out of pocket expenses, you will also have to satisfy your annual deductible. This amount will depend on the policy you have chosen, and generally with a good policy it won’t be more than a few hundred dollars, which should be paid off shortly after you initiate the policy.
After your deductible is paid, you will then owe a small amount of each bill, called a co-payment. Co-Payments are usually about twenty percent of the bill itself. If your doctor or specialist charges outrageous fees, the percentage of your co-payment might be slightly higher than twenty percent. This is because, insurance companies’ base payment is about eighty percent, but this is based on normal fees for the area that you live in, not on the bill itself. Therefore, if you were to go to a specialist but the fees were a bit higher than usual, the insurance company that you have will more than likely not pay eighty percent. They will see the difference between the normal fees and the fees you have acquired and you will have to pay a little bit of the difference.
Indemnity insurance has another downside, it only covers illnesses or accidents and it does not pay for typical care, or preventive care like flu shots or birth control. Some indemnity insurance plans do not have prescription drug plans either, and therefore if you are looking at an indemnity plan make sure that you look into every single detail to see exactly what it covers.
Managed care is the second type of insurance, and is often referred to as an HMO, or health maintenance organization. With HMOs your deductibles are smaller than with indemnity plans and sometimes they may not be only deductible at all. Your co-payment for HMO is at a fixed rate and is usually set very low. Managed care insurance covers just about everything, from flu shots, preventive care, prescriptions, and any specialist including mental health. The con about managed care is that you have a list of doctors, specialists and hospitals to choose from. If you choose not to select one of the providers on their list, you can still continue to go to the doctor of your choice, and your bill will not be paid by the insurance. This type of care is called nonauthorized care. This type of plan is not recommended if you are already at a doctor of your choice.
Because of the restrictions on a managed care plan, special types of plans called the “hybrids” have evolved. A point of service plan is one of these types of plans, where you will still have a list to choose from, as far as providers go, but it you wish to visit the doctor of your choice you will be required to pay a deductible and co-payments that are slightly higher than your usual HMO. With a POS you will have a few options to choose from. If you wish to stay in the list, you will not be charged a deductible, but if you wish to travel to another specialist, hospital or any other type of provider, you will have to pay a little extra, but at least they will still pay the bill.
Every day insurance companies are becoming more and more completive. Open access is a managed care or HMO plan that will allow you to see a specialist even without a referral. This is a very good thing, since like this you won’t have to wait and make appointments at different doctors just to get one referral so you could see a specialist. You have to read each policy carefully and be sure to ask any questions should you find yourself lost in all of the paperwork.
There are a number of different kinds of policies. Depending on what exactly you are looking for, how much you want to spend, and the doctors you want, you could choose an HMO, or an indemnity care insurance plan.