Overview of the Types of Health Care Plans

Once you understand the basic concept of the three Cs (CCC) Cost, Coverage and Control (Click Here ) that applies to all Health Care Coverage and Insurance plans it will be apparent that selecting the best type of plan to meet your needs can be quite straight forward. The plan Premium largely determines the basic type and general parameters of a plan. Any confusion over how to determine which plan may be best for you and your Family will fade once you have reviewed the above document.

Having reviewed the Cost, Coverage and Control (Click Here )document one should realize that the basic type of Health Care Plan and parameters selected (coverage) is directly related to the cost and control aspects. However, before jumping into a discussion of the specific types of coverage, it helps to know how they relate to each other. While you have probably heard of many different ‘buzzwords’ describing different kinds of health care coverage and may also be confused about the differences, it helps to start with the awareness that there are fundamentally only two basic kinds of plans as follows:

Indemnity or Fee-for-service - plans generally allow you the greatest choice of providers and control over your medical care as there are no restrictions imposed by the plan. At one time, indemnity plans required you to submit a claim to the Health Insurance carrier for reimbursement of medical expense incurred. Today, most providers will now file a claim directly to the insurance carrier on your behalf. Indemnity plans are now the least common form of health care coverage as they are generally the most expensive because they place the least restrictions on you in terms of Out-of-Pocket expenses and selection of providers.

Managed care-all other plans available today fall into the category of what is referred to as Managed Care Plans. Most people have some type managed-care plan. These plan types function quite differently and include: Health Maintenance Organizations (HMO), Self-Insured Trusts, Preferred Provider Organizations (PPO) and Point-of-service (POS) plans. These plans offer you a wide range of choice in terms of Cost, Coverage and Control (Click Here ). This is where most people start to get confused as the premium cost can vary dramatically and the value of what you are getting is often not clear.

Different forms of managed care plans reimburse the providers covered under the plan differently. This can have a dramatic affect upon the control you have over the direction and quality of care available. Furthermore, traditional HMO and Self-Insured Trusts are considered pre-paid health care and not insurance. You will learn the subtle difference this makes in terms of how this affects how providers are paid, coverage is delivered, and the control you actually have in the process. All forms of managed care now work under a cloud of distrust caused by media reports of denied services, conflict of interest, and fraud. A number of states now mandate certain forms of care (e.g., length of hospital stays for child birth, mental health, mammograms). The Federal government is now contemplating a broad set of standards, called the "health care bill of rights", designed to protect patients from their managed care insurers.

Both of the above two categories of health care coverage plans are available as an Employer Group or as Individual/family coverage. The fundamental or basic types of health care coverage and insurance are presented below. Select any of the following types you may be interested in so you can begin to develop a better understanding of what may best fit your life situation:

• Indemnity or Fee-for-Service Insurance
• Managed Care:
• HMO plan (HMOcp Closed Panel is pre-paid medical plans or HMOn Network which is actually insurance), PPO plan (Insurance);
• POS Plan (Insurance);
• EPO Plan; and 
• FSA, HSA, and HRA Plans 

When thinking about which type of plan might be best suited for your company or individual/family needs it may be helpful to get a historical perspective on how these plans evolved. It may help you better understand why they exist. Below is a graphic indication the evolution of health care coverage and insurance plans over the last 50 plus years.

***Evolution Plans Pic

The following graph will give you an idea of which how popular each of the basic plans are according to data provided by the US Census Bureau form 1998-2006. Note that the latest product development of High Deductible Health Plans (HDHP) viability still has to be proven in the marketplace as is evidenced by their late arrival and very small market share of 4%.  

***Growth Managed Care Pic

The high deductible health plans are associated with yet other terms you may have heard of such as Flexible Spending Account (FSA), Health Savings Account (HSA), Health Reimbursement Arrangement (HRA), and [See HIA] (HIA) are all variations of the more general category Consumer Driver Health Plans (CDHP). Most health care coverage and health insurance companies now provide CDHP versions of their basic plans. CDHP plans were developed primarily as a means of reducing the premium costs by shifting the payment of certain categories of expenses to the consumer. The FSA and HAS offer federal (as well as most state) tax incentives, but an account must be opened and funded. For further information see FSA, HSA, and HRA Plans.

Don’t be surprised if the difference between plans is not so clear because, over time, they have become more similar than different. In particular, the distinction between the basic plan types has diminished over the past decade to the point where most consumers find it hard to tell them apart.

Now you see that the reason why PPO and HMO plans may seem similar is that HMOs are no longer the exclusive domain of health care coverage companies offering pre-paid medical care. Insurance companies moved into that area by creating plans that appear similar and are in fact labeled HMO, but there are differences.

At this point. you should have a better grasp on coverage and control differences between plan types. The final piece of the puzzle is cost. Click here to access a discussion of [See HCD-CC].

Please continue with your use of our site by selecting any the basic heath care plan types indicated under the Types of Plans Category on the left side of the screen or you may have specific [See QYMWA], and may also want to seek the advice of a Licensed Certified Field Broker/Agent ( Click Here), or select other information you may be seeking.