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Health Insurance Plans

Basically there are two types of plans offered by different health insurance companies.

They are 1. Indemnity plan (fee-for services) and 2. Managed care plan. Since “one size does not fit all”, you may not be satisfied with a single plan that suits your friend.

I. Indemnity plans :

The indemnity plans are otherwise known as cafeteria or flexible spending plans which are generally sponsored by employers where the employees have the option of choosing their own benefit package. These packages include multiple option pre-tax conversion plan, pre-tax conversion plan, employer credit cafeteria plans and medical plans plus flexible spending accounts. Find out from your employer about the types of plans available that matches your needs.

The flexibility or rather an advantage in the indemnity health plans is that you are free to choose your health care provider. In other words, you can select your physician, set the preferred hospital where you can get the treatment for a set premium.

This indemnity plan reimburses the expenditure based on the service provided. More often, the insured is supposed to bear a percentage of the bill and when the limit is reached, the remaining medical expenses can be taken care of by the insurer. Go through the set of guidelines given by your health insurance provider thoroughly because sometimes the insurer imposes restrictions on covered services and may require prior authorization for hospital care or other expensive services.

1. Basic and Essential Health Plans:
The advantage is that they provide health insurance at relatively low cost but the coverage is limited. The customer is expected to thoroughly peruse the descriptions provided in the document and make himself aware of the medical conditions which are covered by the policy. Most

of the times, these kinds of plans do not cover basic treatments like maternity cover, chemotherapy or some other medical disorders. Moreover, the premium for health insurance is calculated based on the age, gender, employment status, health status, geographic location among other things.

2. High Deductible Health Plans : Otherwise called as catastrophic health insurance plan, it is a cheap way of providing insurance coverage but the catch point is that it becomes effective only after a high deductible is met and this may vary considerably (For individuals, the deductible is at least $1,000 and for a family, it works out to approximately $2,000).

3. Health Savings Accounts (HSA): This is a new addition to the already existing health insurance options. Practically speaking, you are not at all paying the premium for insurance coverage but you are saving tax free money that meets your out of pocket medical expenses. In other words, it is a savings product that paves the way to pay alternatively for the health care.

The money in your HSA account is fully under your control and you determine the way it has to be expended / invested for future purposes. Most of the time, when an individual signs up for the HSA, he is generally required to buy a High Deductible Health Plan as well to reduce the risk.

II. Under the managed care option plans, there are different plans available to suit the taste of different customers.

1. Health Maintenance Organizations (HMOs) : These organizations allow you to access an extensive network of practicing physicians, hospitals, facilities and other related health care professionals for a reasonable premium. The individual is at liberty to choose a primary care doctor from the list provided by the HMOs who takes care of your health care and he will be responsible to guide you to a specialist in case when a need arises.

The cost involved in medical coverage with this kind of policy is less but the insured is expected to bear the fee or co-payment for services such as doctor visits or prescriptions.

More options under the managed care health insurance plan

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