3. Private health insurance - Comparison of plans and providers

In the United States, private health insurance plans can be written as group or individual plans, or as indemnity or managed care plans.

Comparing Private Insurance Plans

Alison purchases health insurance coverage for herself. This is an example of __?____insurance plan.

Indemnity, or fee-for-service, plans and managed care plans cover medical expenses if you are sick or injured, but in different ways. The following questions examine the general differences between the two plans.

Taking a closer look at how these plans provide coverage will help you begin to customize a health care plan that best suits your requirements.

Select the plan that most closely matches each given description.

	Indemnity plan	Managed care plan
Insureds create contract with an insurer who does not provide health care services
The higher the deductible, the lower the premium
Insured receive health care services from a designated group of providers
May not even involve an insurance company
No annual deduction is incurred, but a small co-payment may be required

Now that youve taken a closer look at the differences between these types of plans, consider the following statements. Each indicates common preferences and situations.

Select the type of plan to which each statement most closely aligns.

	Indemnity plan	Managed care plan
My family history strongly suggests Ill suffer serious and perhaps unique illnesses as I age.
I believe prevention is the best medicine.
I prefer the flexibility of increasing or decreasing the size of my deductible to influence the cost of my health care insurance.

There are several types of managed care plans, including group health maintenance organizations (group HMOs), individual practice associations HMO (IPA HMOs) preferred provider organizations (PPOs), exclusive provider organizations (EPOs), and point-of-service (POS) plans. Deciding which particular type of practice would best meet your needs requires knowing the major characteristics of each.

Identify the particular form of private health care organization or plan described by the following three clues.

	Clue #1: I can receive medical services from both in-network and out-of-network doctors and hospitals.
	Clue #2: I will incur 100% of the costs of any medical services obtained from out-of-network providers.
	Clue #3: I am interested in purchasing some form of a managed care plan.

The organization or plan being described is

a PPO

a Blue Cross/Blue Shield plan

an EPO

a group HMO