Today, more than half of all U.S. residents who have health insurance are enrolled in some kind of managed care plan, an organized way of both providing services and paying for them.
If you receive health insurance coverage through your employer, your human resources or employee benefits office can provide you with information on your health plan options and what each plan covers.
Health insurance plans are usually described as either indemnity (fee-for-service) or managed care. Indemnity and managed care plans differ in their basic approach. Although over time, the distinctions between these kinds of plans have begun to blur as health plans compete for your business. Some indemnity plans offer managed care-type options, and some managed care plans offer members the opportunity to use providers who are outside the plan.
Stated broadly, the major differences concern choice of providers, out-of-pocket costs for covered services and how bills are paid.
With any health plan, however, there is a basic premium, which is the amount you or your employer pays, usually monthly, for the health insurance coverage. In addition to the premium, there are often other costs, which will vary by plan. In considering any plan, you should figure the total cost to you and your family, especially if a family member has a chronic or serious health condition.
Usually, indemnity plans offer more choices of doctors (including specialists, such as cardiologists and surgeons), hospitals and other health care providers than managed care plans. Indemnity plans pay their share of the costs of a service only after they receive a bill.
Managed Care Plans
Managed care plans have agreements with certain doctors, hospitals and health care providers to give a range of services to plan members at reduced costs.
Various types of managed care plans work differently and include preferred provider organizations (PPOs), health maintenance organizations (HMOs), exclusive provider organizations (EPOs) and point-of-service (POS) plans.
A PPO is a form of managed care and closely resembles an indemnity plan. A PPO has arrangements with doctors, hospitals and other providers who have agreed to accept lower fees from the insurer for their services. As a result, your cost should be lower than if you go outside the network.
HMOs are the oldest form of managed care plan. They offer members a range of health benefits, including preventive care, for a set monthly fee. HMOs will give you a list of doctors from which to choose a primary care physician. This doctor coordinates your care, which means that generally you must contact him or her to be referred to a specialist. If you belong to an HMO, the plan only covers the cost of charges for doctors in that HMO. If you see a provider outside the HMO, you will be responsible for the provider’s bill.
Many HMOs offer an indemnity-type option known as a POS plan. Primary care doctors in a POS plan usually make referrals to other providers in the plan. But members can refer themselves outside the plan and still obtain plan coverage. If the doctor makes a referral to a provider out of the network, the plan pays all or most of the bill. If you refer yourself to a provider outside the network and the service is covered by the plan, you will have to pay a co-payment.
In an EPO Plan, members can see any provider in the EPO network. There is generally no need to choose a primary care physician and no referrals are necessary to see a network specialist. There are no claim forms to file and members generally are only responsible for their co-payment for covered services.
In general, you will have less paperwork and lower out-of-pocket costs if you select a managed care type plan and a broader choice of health care providers if you select an indemnity-type plan.
You may be able to get group health coverage – either indemnity or managed care – through your employer or a family member’s employer. Many employers allow you to join or change health plans once a year during open enrollment. Once you choose a plan, you must remain in that plan for one year. Discuss choices and limits with your human resources office.
If you are self-employed or if your company does not offer group policies, you may need to buy individual health insurance. Individual policies cost more than group policies. You may want to talk with an insurance broker about the indemnity and managed care plans that are available for individuals.
Some organizations – such as unions, social or civic groups, Chambers of Commerce or professional associations – may offer health plans to their members.
After you review what benefits are available and decide what is important to you, you should compare plans. Many factors need to be considered. These include quality of care, services offered, choice of providers, location and costs. You won’t know in advance what your health care needs for the coming year will be but you may be able to estimate what services you and your family might need. Figure out what the total costs to your family would be for these services under each plan.
For information specifically regarding doctors licensed in New York state, go to the Center for Consumer Health Care Information. This NYS Health Department web site provides physician profiles and managed care performance reports.
To verify that your doctor or other health care provider (i.e., nurse, physical therapist, pharmacist, etc.) is licensed in New York state.
American Board of Medical Specialties
will tell you if the doctor is board certified. If certified, the doctor completed a training program in a specialty and passed an exam (board) to assess his or her knowledge, skills and experience to provide quality patient care in that specialty. Primary care doctors also may be certified as specialists. While board certification is a good measure of a doctor’s knowledge, it is possible to receive quality care from doctors who are not board certified.