More than half of all Americans who have health insurance are enrolled in a managed care plan. Managed care plans usually cover a wide range of health services. With these plans, costs are lower when patients use the doctors and other providers who participate in the plan (network providers).

In most cases, you will not have to fill out any insurance forms or submit any claims to the insurance company when you use in-network providers. Usually, you will pay a copay (typically $10 to $20 for an office visit) each time you go to the doctor or hospital or fill a prescription. Your copay may vary depending on whether you see your primary care doctor or a specialist and whether you receive a generic or brand name prescription drug.

Most managed care plans have a list of drugs that they cover, called a formulary. Your copay for prescription drugs will probably depend on whether you are getting a generic drug, a brand name formulary drug, or a brand name drug not on the plan’s formulary. For example, the copay might be $10 for a generic drug, $25 for a formulary drug, and $40 for a brand name non-formulary drug. Be sure to check the formulary of the plan you are considering to make sure it will cover any routine prescription drugs that you and your family members take.

Some managed care plans have a mail-order pharmacy option. This means that you send your doctor’s prescription for routine maintenance drugs (for example, blood pressure medicine, drugs to control blood sugar, and other drugs used on a regular basis) to the mail order pharmacy. In most cases, you will receive a 3-month supply of your medication by return mail. You still pay a copay, but your cost may be lower than it would be at a local retail pharmacy.

If you choose to enroll in a managed care plan instead of an indemnity plan, you may have lower out-of-pocket expenses for health care, as long as you see doctors who are part of the plan (in-network providers).

There are three main types of managed care plans:

* Health maintenance organizations (HMOs).
* Preferred provider organizations (PPOs).
* Point-of-service plans (POS).

All three types of managed care plans have contracts with doctors, hospitals, and other providers. They have agreed on certain fees with these providers. As long as you get your care from a plan provider, you typically will be responsible only for any cost-sharing your plan requires.

It doesn’t matter if you are eligible for group insurance or choosing an individual plan, you should carefully compare costs and coverage. Be sure to compare:

Premiums.
Coverage/benefits.
Access to your doctors, hospitals, and other providers.
Access to after hour and emergency care.
Out-of-pocket costs (coinsurance, copays, and deductibles).
Exclusions and limitations.

Even if you do not get to choose your own health plan—for example, if your employer offers only one plan-you still need to understand your coverage. What kind of services are covered by the plan? What steps do you need to take to get the care you and your family members need? When do you need prior approval to ensure coverage for care (for example, elective hospitalization for scheduled surgery)? How are benefits paid; do you have to submit a claim?

Make sure you understand how your plan works. Don’t wait until you need emergency care to ask questions.

If you are choosing between indemnity and managed care plans, remember that they may differ in several important ways, including:

How you access services.
How you obtain specialty care.
How much and sometimes how you pay for care.
Despite these differences, indemnity and managed care plans share some features. For example, both types of plans cover a wide array of medical, surgical, and hospital services. Most plans offer some coverage for prescription drugs. Some plans also have at least partial coverage for dentists and other providers.

The major difference between indemnity (non-network based coverage) and managed care plans (network-based coverage) concerns choice of doctors, hospitals, and other providers; out-of-pocket costs for covered services; and how bills are paid.

Be sure to check on the physicians and hospitals that are included in the plan.

If you are self-employed or your employer does not offer health insurance, you may not have access to group insurance. You may, however, be able to purchase individual coverage directly from an insurance company.

When you buy your own health insurance, you will be responsible for paying the entire premium rather than sharing the cost with an employer. You should shop around to find a plan that fits your needs at a price that you are willing to pay.

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Indemnity health insurance plans are more regularly known as traditional health insurance plans. These health insurance plans can be costly but often cover most health problems that may arise, while other insurance plans exclude some illnesses or diseases from their coverage.

Some disadvantages to indemnity plans are that they do not usually cover preventative health care like physicals, and traditional health insurance plans often cover only a percentage of your bill. Research the advantages and disadvantages to indemnity health insurance when you are considering health insurance options.

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• Premium: The amount the policy-holder pays to the health plan each month to purchase health coverage.
• Deductible: The amount that the policy-holder must pay out-of-pocket before the health plan pays its share. For example, a policy-holder might have to pay a $500 deductible per year, before any of their health care is covered by the health plan. It may take several doctor’s visits or prescription refills before the policy-holder reaches the deductible and the health plan starts to pay for care.
• Copayment: The amount that the policy-holder must pay out of pocket before the health plan pays for a particular visit or service. For example, a policy-holder might pay a $45 copayment for a doctor’s visit, or to obtain a prescription. A copayment must be paid each time a particular service is obtained.
• Coinsurance: Instead of paying a fixed amount up front (a copayment), the policy-holder must pay a percentage of the total cost. For example, the member might have to pay 20% of the cost of a surgery, while the health plan pays the other 80%. Because there is no upper limit on coinsurance, the policy-holder can end up owing very little, or a significant amount, depending on the actual costs of the services they obtain.

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Group health plans may exclude coverage for a specific disease, limit or exclude benefits for certain types of treatments or drugs, or limit or exclude benefits based on a determination that the benefits are experimental or medically unnecessary - but

only if the benefit restriction applies uniformly to all similarly situated individuals and is not directed at individual participants or beneficiaries based on a health factor they may have.

Generally pre-existing illness cannot be excluded if you sign up for your plan at work within a certain time period of it being offered to you.

Advantages to Indemnity Health Insurance Plans

Indemnity health insurance plans are more regularly known as traditional health insurance plans. These health insurance plans can be costly but often cover most health problems that may arise, while other insurance plans exclude some illnesses or diseases from their coverage.

Some disadvantages to indemnity plans are that they do not usually cover preventative health care like physicals, and traditional health insurance plans often cover only a percentage of your bill. Research the advantages and disadvantages to indemnity health insurance when you are considering health insurance options.

More on Indemnity Health Insurance Plans

COBRA, if offered by your employer, requires continual coverage to be offered to covered
employees, their spouses, and their dependent children when group health coverage is lost due to certain specific events.

Those events include:

• the death of a covered employeetermination or reduction in the hours of a covered employee’s employment for reasons other than gross misconduct
• divorce or legal separation from a covered employee
• a covered employee’s becoming entitled to Medicare
• a child’s loss of dependent status (and therefore coverage) under the plan.

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As medical care advances and treatments increase, health care costs also increase. The purpose of health insurance is to help you pay for care, whether it be long term care or short term care. Health insurance protects you and your family financially in the event of an unexpected serious illness or injury that could be very expensive. In addition, you are more likely to get routine and preventive care if you have health insurance.

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Most of us are concerned about obtaining health insurance. It’s easy to get confused about all the options or about how to obtain the best health insurance. There are several ways to obtain health insurance, though, and some of them are not always obvious.

Health insurance is commonly obtained through an employer. Nearly all employers offer some sort of “group” health insurance plan for employees. The term “group” simply denotes that there is a large group of people on the plan, which decreases the cost of the monthly premium for all members. These plans can cover you, your spouse, and your family, depending on the specific policy.

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