Features of Health Plans

Features of Health Plans
There are two types of health care plans. Indemnity and managed care. Indemnity plans utilize the fee-for-service approach, which means that the service is rendered before the fee is paid. Indemnity plans are often higher in cost than other insurances have higher deductibles that must be met before the insurance begins to cover some, but not all medical care. Preventive care is not normally covered. Even after the deductible has been met the insured will still need to pay the coinsurance which is usually 20 % of the total bill.
Managed care plans (MCPs) are somewhat different, as they combine finance and health care management with the provision of service. Managed care organizations (MCOs) were first established in 1929, and today almost all employees that have insurance are enrolled in an MCP. The most common forms of MCPs are: Health maintenance organizations (HMOs) plans; point of service (POSs) plans; preferred provider organizations (PPOs); and consumer directed health plans (CDHPs). In an HMO there is a network of providers that the insured must go to obtain services; if the insured were to go outside of the network the service would not be covered. Also the patient must choose a primary care physician (PCP) to manage their care. Since many people did not like being told that they could only see certain providers, POS’s and PPO’s were created to compete for those peoples memberships. In a POS plan patients still must choose a PCP, although they allow patients to use non-network providers, however the patient must pay a percentage of the charge in order to do so. In a PPO plan patients do not need a PCP and can see both in and out of network physicians, paying only a slightly higher copayment to see an out of network provider. In CDHPs two different aspects of the other types of insurances are combines together. The first part is the type of health plan (usually a PPO) and the second part is a “health savings account” (HSA). An HSA lets people put money from their paychecks into it (before it is taxed) to help pay for healthcare.
Working in a physician’s office I have come to the conclusion that capitated HMOs are more advantageous financially for the provider. For example when a provider signs a contract with an HMO and the HMO assigns the physician 150 patients, for which the physician receives $60.00 a month per patient totaling $9000.00, whether they come in to be seen or not. Out of those 150 patients possible ¼ of them will actually be seen in the office. So in essence the physician is making a tidy profit from patients they most likely will see maybe once or twice a year.

References
Valerius, J., Bayes, N., Newby, C., & Seggern, J. (2008). Medical insurance: An integrated claims process approach (3rd ed.). Boston: McGraw-Hill.