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Jan 5, 2006 Different Types of Health Insurance
Plans
Traditional health insurance
Up until about 30 years ago, most people had traditional indemnity
coverage. These days, it's often known as "fee-for-service." Indemnity
plans are a bit like auto insurance: you pay a certain amount of your
medical expenses up front -- in the form of a deductible -- and
afterward the insurance company pays the majority of the bill.
Advances in modern medicine increased the cost of providing health
care and made it possible for people to live longer. Those advances
caused many insurance companies to look for ways to reduce their costs
of doing business, giving managed care the boost it enjoys today.
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Jan 3, 2006
Managed care
Managed care has been around in one form or another since the 1930s, but
it really took off in the last 10 years. As it grew, it evolved, leaving
us with three basic types of managed care plans. Today, the majority of
people with private health insurance have some type of managed care.
Although there are important differences among the
different types of managed care plans, there are some similarities. All
managed care plans involve an arrangement between the insurer and a
selected network of health care providers, and they offer policyholders
significant financial incentives to use the providers in that network.
There are usually explicit standards for selecting providers and a
formal procedure to assure quality care.
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Jan 1, 2006
Health Maintenance Organizations (HMOs)
Most of the time, when you talk about HMOs, you're really talking about
closed-panel HMOs -- the least expensive, but least flexible type of
health plan. They also tend to be geared more toward members of group
plans than individuals.In exchange for a low
co-payment (or sometimes no co-pay at all), low premiums and minimal
paperwork, an HMO requires that you only see its doctors, and that you
get a referral from your primary care physician before you see a
specialist. If you can still pick up the phone, you'll probably need to
get clearance before you can visit the emergency room.
An HMO may have central medical offices or clinics
(such as those used by Kaiser Permanente), or it may consist of a
network of individual practices. In general, you must see HMO-approved
physicians or pay the entire cost of the visit yourself. HMOs have the
best reputation for covering preventive care services and health
improvement programs. |
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Mini Blog. |
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I agree with Posner that companies should not be forced to provide
health insurance for all their employees since some employees may not
want such insurance--for example, they may get it from a spouse. I also
agree that co-payments should be required from employees since otherwise
they have a strong incentive to use excessive medical care. Some of the
older companies with generous health insurance plans, such as those in
the automotive sector, now face staggering health expenses, in part
because their plans had negligible co-payments by employees.
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