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While few people would advise going without health benefits, the number of people able to afford the costs of medical coverage is steadily decreasing. Spiraling costs have encouraged many states to reform their current systems and move toward a universal system. Legislatures are working to reduce the cost of care for uninsured patients.
Employers are contracting with major insurance carriers to offer cost-effective health care solutions to their workforce—or reevaluating their current level of coverage. The most common, and generally least expensive, option is group insurance. Here, employers pay all or part of the cost of the plan, and some offer various plan types within their benefits package.
Here’s a brief look at the types of health insurance policies available to you:
Indemnity or fee-for-service coverage
- Freedom to choose your own doctor
- Services are paid for at time of each visit
- Predetermined benefits for covered medical expenses are based on your deductible and co-payment amounts
To be reimbursed for medical expenses, you must complete and mail forms to your insurer. Fee-for-service plans are costly to administer, and place all of the responsibility on the individual to track his or her medical expenses.
Managed care coverage
Managed health care plans aim to steer a patient toward a preapproved network of doctors and facilities by making it a requirement or by providing additional benefits. These providers are owned, managed, or under contract with the insurer.
Health maintenance organizations (HMOs)
- Fixed monthly premium
- Network of physicians and hospitals to choose from
- A PCP (primary care physician) provides referrals to specialists if further medical care is needed
- Co-payment required at time of visit
- Care received outside of network not covered
Preferred provider organizations (PPOs)
- A PCP is seen for all medical needs
- Not always reimbursed in full for specialists seen outside of network
- Reimbursement paperwork must be completed and medical expenses recorded by the insured party
Regardless of which plan you think may be your best fit, it is important to consult with a financial professional about your options. Choosing an incorrect plan for your situation may have an unwelcome impact on your bottom line.
© Copyright 2008 Commonwealth Financial Network
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