Advantages and Disadvantages of Different Health Insurance Plans
Different types of health insurance plans are available to Californians with individual/family insurance or with group health insurance. Two main categories are managed care and indemnity care.
Know What You’re Getting!
Managed Care
Comprehensive health care provided to members of a health care organization. With a network of health-care professionals and facilities, managed care proposes to keep health care easy and affordable. Preventative care is encouraged, and you may receive help paying for fitness clubs or health videos, for example.
Managed care includes HMO’s, PPO’s, POS plans, and EPO’s. The plans are generally alike but can vary in detail among insurance carriers.
California Indemnity Health Insurance, or Fee-For-Service Plans
The patient pays out-of-pocket for services; the subscriber and the insurance company share the costs for each medical service, with designated percentages, deductibles, and limits.
Advantages:
- Costs are shared by the subscriber and the insurance company at fixed percentages, such as 20% coinsurance paid by the subscriber and 80% by the insurance company.
- Any physician or health care facility may be used.
- There is a limit, or cap, on your yearly out-of-pocket expenses, after which the insurance company will pay the entire reasonable cost of service.
Disadvantages:
- The insurance company covers “usual and customary” costs. You pay any amounts beyond “usual and customary” that you are charged for services.
- Bills must be sent to the insurance company by the subscriber or health-care facility.
- A yearly deductible is paid by the subscriber.
- There may be a lifetime cap, or limit, on benefits. Once that limit is reached, the company will no longer pay for services.
The insurance company covers “usual and customary” costs. You pay any amounts beyond “usual and customary” that you are charged for services.
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