Health insurance usually allows individuals freedom to choose health care providers and flexibility when seeing medical specialists. Health insurance plans limit participants in their choice of medical providers and often have restrictions for consulting specialists. Both types of medical coverage offer advantages and disadvantages, so choosing between them is up to the individual and their individual health insurance plan. However, the pros and cons should be weighed before choosing the insurance which will best meet the needs of the insured person.
Major Medical Insurance
Most health insurance falls into the category of major medical insurance, which covers large medical expenses like surgery. As a rule these insurance policies have a deductible of between $100 and $1000 dollars and a 20 percent co-payment which must be covered by the policyholder. Major medical insurance does not cover routine medical check ups or the cost of drugs administered outside the hospital. The one exception to this occurs when the expenses are related to surgical procedures or other care specified in the policy.
Health insurance plans are offered both by traditional health insurers and by large medical corporations.
Plan providers make agreements with health care providers which limit the costs of doctor visits, medical tests, and hospital stays. By limiting the costs of medical visits, the health care plan provider can keep their expenses lower, which keeps premiums lower. Co-payments on medical plans are usually limited to a specific monetary amount like $10 or $20 dollars for each visit or service.
HMO and PPO Plans
The most commonly offered health insurance plans are health maintenance organizations and preferred provider organizations. HMOs offer the lowest premiums and co-payments, but are the most restrictive because they require individuals to see an assigned primary care physician for referrals to specialists. With an HMO, patients are also required to have all care reviewed by the primary care provider. PPOs allow individuals greater freedom in their choice of medical providers but they have higher premium rates.
Since the advent of managed care organizations or health plans, few people opt for standard medical insurance. That is primarily because it is typically more costly and usually does not include coverage for routine medical visits and prescriptions. Yearly deductibles on health insurance are usually between $1000 and $5000, which means that policyholders must spend this much on medical care before making a claim on the policy. Health policies do not usually place restrictions on the choice of medical care providers.
Which Coverage is Better?
Managed care health insurance plans place restrictions on medical choices but offer lower costs and usually cover preventative medical programs and regular check ups. Health insurance usually doesn’t place any restrictions on the choice of medical provider or the type of tests or services requested by an individual. However, the costs of both premiums and co-payments are usually higher than those of managed care plans. When cost is the determining factor, managed care plans are preferred.
The choice of managed care health insurance plans or traditional health insurance may be made by an employer or group insurance provider. Their primary concerns generally revolve around the cost of providing health care coverage for their employees. Individuals seeking health care insurance must weigh the cost of each type of coverage against the benefits. That way, they can decide which type of coverage will best meet their personal needs and fit within their budget.