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Fee-for-Service Insurance

22 Aug

Fee-for-service insurance is the traditional method used by health insurance companies of charging for health care. Under this method, patients get the benefit of having more options when it comes to treatment decisions since they can go to any doctor and hospital that they want to. Despite this very nice advantage, fee-for-service insurance health care is no longer widely used and has been overshadowed by the use of managed care plans. The reason for this transition is mostly due to coinsurance.

Coinsurance is the amount the patient has to shoulder. Usually, if the patient has a reimbursement plan, the insurance company only reimburses 80% of the doctor’s bill, making the coinsurance 20%. However, if the doctor charges a steeper price than the going rates determined by the insurance company, the patient has to shoulder the rest of the bill. This can leave the patient with very steep medical bills despite having health insurance coverage.

 
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Is Short-Term Health Insurance for You?

20 Jun

As the term implies, short-term health insurance should only be a temporary solution for your health insurance needs. If you have the capability of purchasing a more comprehensive health insurance plan, short-term insurance is definitely not for you. So who are the people who need and will benefit the most from a short-term health insurance plan?

Unemployed – If you are in between jobs, a short-term health insurance plan will be perfect for you since it is very cheap and will not tie you to paying coverage for a long time. This includes new graduates that are still looking for jobs.

Newly hired employees – It usually takes 6 months from the date of employment before an employee is eligible for the company’s health plan. To ensure coverage during this time, purchase a short-term plan.

Newly Independent Children – Young adults that are not full-time students and reach the cut-off age for their parent’s health insurance plan can buy short-term insurance until they find a job that has health insurance benefits or is able to purchase a private plan.

 
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Short-Term Insurance: The Pros and Cons

15 Apr

Short-term health insurance poses relatively less risk for insurace companies, which is why they are willing to give coverage for a significantly smaller amount than traditional medical coverage. This is perhaps the biggest advantage in the eyes of those that go for this type of medical insurance. However, aside from that short-term health insurance has other advantages, including the following:

  • They can be use in any hospital and with any doctor within the country.
  • Coverage starts the day after the application is postmarked.
  • Can cover all eligible dependents.
  • Some plans also give a “Certificate of Creditable Coverage”, which guarantees your current state of health, thus disallowing other insurance companies denial of coverage based on pre-existing conditions.

Of course there are also disadvantages to short-term insurance. The most glaring disadvantage is perhaps the fact that there is no guarantee that you will always qualify for another plan when the short-term health insurance policy expires. Aside from this, short-term health insurance plans do no cover dental and vision problems, as well as pregnancy and childbirth.

 
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Posted in Health Insurance Basics

 

Types of Managed Care Plans

25 Feb

There are three kinds of managed care plans are called Health Maintenance Organizations (HMO), Preferred Provider Organization (PPO), and Point of Service (POS).

HMOs work by having policy holders pay health coverage premium in advance, whether or not they will need health care eventually. In care the policy holder does need health care, including preventive care, the HMO will pay for all of the medical bills incurred, provided that the health condition are covered by the policy and that the patient went to a provider that is part of the HMO’s network. There are no hidden fees involved but all tests and procedures to be done must first be approved by the HMO.

For PPOs, patients have the option of going doctors and hospitals part of the networks, or “preferred providers”, only when they want to. Whenever they go to a preferred provider, PPO members get discounted rates but have to pay a small amount, which is called co-pay. The good thing is that even with a primary care doctor outside of the network, tests and procedures ordered by that doctor can still be covered through the PPO.

POS are plans that combine features of HMOs, PPOs, and traditional fee-for-service plans.

 
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Posted in Health Insurance Basics

 

What is Managed Care?

30 Jan

Managed care refers to methods or programs used by health insurance companies to control medical cost. A common characteristic of managed care organizations is that they manage to lower costs for its members or policyholders by buying services in bulk. What this means is that they pay doctors and hospitals bulk prices, passing on the savings to their policyholders.

The most glaring downside of managed care is that health plans of this kind offer limited choices, from hospitals to doctors and even tests and medicines. Policyholders that opt to get health care outside of the provider network ends up having to shoulder most or all of the medical bill incurred, even if the only reason for not going to an outside provider is lack of accessibility or an emergency. Despite this, the difference in cost from traditional health care methods (i.e. fee-for-service) still makes managed care plans very much widely used.

 
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Posted in Health Insurance Basics

 
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