A fee-for-service plan gives you the flexibility to see a physician or receive a medical service without a referral from a primary-care physician. The provider bills separately for each patient visit or service provided, and the insurance company pays all or a set percentage of the fee.

Here are some other features of a fee-for-service plan:

You, or you and your employer, pay a monthly premium.
You may have to complete and submit claim forms, or your provider may do it for you.
You usually must pay an annual deductible. Only medical expenses allowed by your plan count toward the deductible.
Once you meet the deductible, the plan pays a percentage (typically 80 percent) of the “reasonable and customary charges” — the prevailing cost of a medical service in a specific location.
You pay your coinsurance (the portion of covered health care costs for which you are responsible, usually a fixed percentage, typically 20%).
Some plans pay hospital expenses in full, while others pay a percentage or have another deductible to pay.
If the provider charges more than the reasonable and customary charges, you must pay the difference.
Most plans have an out-of-pocket maximum or cap. Once your out-of-pocket medical expenses for covered charges reach a certain level during the calendar year, the plan pays the full reasonable and customary charges for additional covered care that year.
The plan may have a lifetime limit on total benefits paid. If you are seeking coverage through an individual plan, look for plans with a limit of at least $1 million.

High Deductible Health Plans

A high deductible health plan is a new option that can work in conjunction with a health savings account or a health reimbursement account. Enrolling in a qualified high deductible health plan may qualify you to open a health savings account, fund the account with pre-tax dollars and then withdraw funds from the account tax free to pay eligible health-care expenses.

The basics of high deductible health plans are as follows.

Monthly premiums may be lower than traditional health plan premiums.
The annual deductible must be met before plan benefits are paid.
They generally have higher annual out-of-pocket maximums than traditional health plans (for example, $5,000 for an individual and $10,000 for a family).
An exception is made for preventive care services, which may be paid by the plan after a co-payment. A maximum preventive care amount (up to $300, for example) may apply.
When combined with a health savings account or health reimbursement account, these plans can help build savings for future medical expenses and they can allow greater flexibility over how you use your health-care dollars.

Managed Care Plans

Managed care is a health-care delivery system that controls the cost, amount, location and intensity of health services provided to its members in an effort to control health care costs and improve quality.

There are several different types of managed care plans. A health-care provider is an individual or institution that provides medical care, including physicians, hospitals, skilled nursing facilities or intensive care facilities. Health-care providers agree to accept a predetermined fee from the plan to provide their services. The patient pays a co-payment for each visit. There may also be a small deductible to meet.

With managed care:

Your choice of physicians, other health-care providers and hospitals are often limited.
You may be required to choose, or may be assigned, a primary-care provider (PCP) whom you will see for all routine care. The PCP coordinates care and approval is needed for referrals to specialists or non-routine care in an effort to control unnecessary costs.
You will probably pay a co-payment for each office visit, prescription and other routine medical expenses.
Generally, you do not have to file any claims or paperwork.
Most managed care plans require pre-authorization and approval of the service for any hospitalization unless it is an emergency.

Health Maintenance Organization (HMO)

A health maintenance organization provides comprehensive medical services to its members for a premium. Members must use network participating providers — such as physicians, hospitals, pharmacies or other facilities and must be enrolled for a fixed period of time. If you use a nonparticipating provider you will pay the entire cost of medical services charged.

Preferred Provider Organization (PPO)

A preferred provider organization combines managed care with a traditional fee-for-service arrangement and may offer more flexibility. If you use health-care providers — such as physicians, hospitals, testing centers, laboratories or rehabilitation centers who belong to the PPO network, the plan works essentially like an HMO. You may pay a co-payment or coinsurance for some services. A co-payment is a fixed dollar amount that you pay before a service is covered. Coinsurance is a percentage of the total bill that you pay. You can also use providers who are not part of the plan, but you may be subject to a higher deductible or co-payment.

Point-Of-Service Plans (POS)

A point-of-service plan allows patients to choose from different types of providers at the time service is rendered. It is essentially the same as a PPO, except most POS plans use primary-care providers to coordinate patient care, while PPOs usually do not. A POS plan is often offered as an option by HMOs, at a higher monthly premium and with higher co-payments. Patients may receive service from a network provider at a discount or no out-of-pocket cost, while service from a non-network provider will cost more.

Updated Wednesday, January 23, 2008

HELPFUL FORMS & LISTS

Comparing Health Insurance Plans Work Sheet

Comparing Health Insurance Plans Costs Work Sheet