Basic Health Insurance Plans

There are two basic categories of health insurance plans: managed care plans and indemnity plans. In some group plans, both are provided and you have to choose the one that is best for you and your family.

Indemnity health insurance plans are also known as reimbursement plans. These plans will reimburse you for your medical expenses up to a certain limit. The insurer pays a percentage of the total charges, no matter how much they are. The amount that is reimbursed does not depend on the cost of the medical care. Your reimbursement will never exceed your expenses.

This type of plan is expensive. They usually cover most illnesses or diseases. Your monthly premium will probably be higher than that of a managed care plan. You will also probably have to pay upfront costs and submit paperwork to your insurer. Your doctor will probably submit the forms for you. The deductible on these plans is usually manageable.

With an indemnity health insurance plan, you can choose your own physician. You can also see a specialist without having to be referred by your primary care physician. If you are traveling, and have an accident or need medical attention, you can go to the nearest hospital or physician without worrying about the expense.

Managed care health plans are categorized as Health Maintenance Operations (HMOs), Point-of-Service (POS) plans, and Preferred Provider Organizations (PPOs). These insurance plans are more flexible than the indemnity type of health insurance plan. With these plans, you either pay a monthly fee no matter how many times you see a doctor, and/or pay a co-payment when you see the doctor.

The managed health care plan you choose and the amount you pay determines how large the network of doctors and specialists you can choose from. You can often get this type of plan through your employer.

A managed care health insurance plan may be the most cost effective for you. Indemnity plans give you a lot more freedom of choice in the doctors you see, but it does cost more.

Most employers have an open enrollment period during the calendar year. If you are enrolled in a plan that does not meet your needs, you have the opportunity to change your plan. Be mindful of the needs of you and your family and your budget. Employers will generally pick up most of the cost of health insurance plans, but the individual will also have to make a monthly contribution.