Investment Basics

The concept of Health insurance became public during 1930s when the Blue Cross started presenting what is called pre-paid hospitalization. The Blue Shield came into being following its success and with the advancement of health care unit and with the raise in cost of medication and treatment; a need emerged to pick up health insurance.

Since then a number of commercial insurance companies started making different types of health insurance plans or Medical Plans as per the consumer's choices. Today, it is really essential to understand the different plans offered by the insurance companies and what we should choose as it also depends on our profession that best suit our needs and budget.

The general health insurance plans are as follows:

Fee-for-service plans

This plan is also known as indemnity or traditional health plan. When you choose this type of health insurance, you will be facilitated to pick up any doctor of your choice or change your doctors at any point you need as well as get admission to any hospital around United States. You would require paying a monthly fee which is your premium. Every year a fixed amount of money should be paid as your medical cost that is called deductible, ahead of what your insurance will take the charge of clearing your medical operating expense. When your deductible is met, your insurance will start to disburse a customary bill percentage.

Sometimes forms need to be filled for sending them to the insurer for getting reimbursement of all the medical costs paid already by you. These jobs are sometimes done by assistants of the doctor's office. You should keep all the receipts of drugs as well as all medical costs handy to keep track of everyday medical expenditure to avoid dispute about future payments.

But there are several drawbacks of fee-for-service plans. The deductible is habitually much high compared to other health insurance plans. Sometimes the patients need to pay his medical bill upfront and knock the insurance provider later by submitting a bill for reimbursement of medical expenses.

Another drawback of fee-for-service plans is it strictly bears the reasonable and customary bills only. Thus the fee-for-service insurance plans sometimes do not cover the bills for checkups like pelvic exams.

Managed care plans

Managed health care plans are of different types. Most of the plans have comprises of low premium along with co-payments, the sum that is allotted for payment during the service period. Insurance holders have no need of filling up file claim forms. These plans cover both preventive health care and cases of serious illnesses. Below is a list of common managed care plans.

A. Preferred Provider Organization or PPO

If you have chosen PPO, you will get the option to choose a certain number of doctors as well as hospitals that are listed within their provider network if you want to get the coverage. As you use the service of their doctors, your medical bills will easily get covered. If you do not choose to use their providers, you have to pay most of your medical the bill from your own pocket as PPO will not give you financial assistance.

B. Health Maintenance Organizations or HMOs

The HMO is a flexible plan as it covers most expenditure after minor co-payment. Under HMOs, your choice of providers is limited only to the provider network approved by them. You have to select a doctor enlisted in their listing. If not, you will have to opt for different health plan. If you want the doctor's services covered, you have to select one from their list.

C. Point-Of-Service Plans

A point-of-service plan or POS is one type of health maintenance organizations. Here, the doctors enlisted in a POS plan may refer you to the concerned doctors you need that may or may not belong to the network. If such doctor is out of the network, you will get your bills paid but you need to pay a co-insurance. Co-insurance is a assured percentage of the expenses.