Is a Managed Care Network Right For YOU?
Managed health care has quickly become the most common type of health insurance in the United States. With health care costs almost constantly on the rise, managed care health insurance can offer a more affordable option to traditional fee-for-service (or indemnity) plans.
Defines managed health care
Explains the costs and coverage of managed care insurance
Compares the three main types of managed care plans
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What is managed health care?
Managed care health insurance offers moderate health care coverage for a relatively low price. But it's not all peaches and cream. The cost of being able to pay less for coverage is hidden in the restrictions to choose your own care.
How it works:
The basic principal behind any managed care network is controlling costs by controlling care access. Managed health care plans differ widely in their details, but all will seek to steer a patient toward a pre-approved network of doctors and facilities, and limit coverage of any treatment sought outside this network.
Another difference lies in the type of care covered.
Typically, managed care plans cover the cost of preventative care such as annual check-ups and shots. Many medical treatments not available within the network are also covered, but often you must follow strict procedures within the managed care network confirming the need of the service before receiving health care from specialists or other physicians outside the network.
There are, inevitably, different types of managed care plans (which we discuss a little further down) which all have different levels of cost and choice.
Your health insurance cost
If you adhere to the managed care plan requirements, almost all of your doctor visits, checkups, and shots will be fully or partially covered. Likewise, if you seek medical attention outside of the network, and do not follow the network's procedure for doing so, you will find that managed care plans typically refuse to cover the entire cost of the health care services provided by the physicians or specialists not within the network.
Because of the restrictions (and the choices you will likely make because of them), it is generally easier to predict the annual cost of health care under managed care plans than with an indemnity plan.
In a nutshell, this is what you can expect to pay:
a monthly health insurance premium.
If you go to a doctor within the health care network you will pay:
a co-payment for certain health care services,
a low per visit coinsurance, or percentage of medical costs (sometimes this fee is as low as $0).
If you choose to go outside the health care network you will pay:
an annual deductible, before your insurance begins to contribute,
a high per visit coinsurance, or percentage of medical costs,
the difference between the cost of treatment and what the insurance company considers to be "reasonable and customary" for the service.
When you are ready to start comparing heath plans, including the types of coverage you may want and the cost of various plans, head over to eHealthInsurance, where you can fill out one short form, and gain access to price and feature comparisons from the top companies in the country.
You should also supplement your search by filling out a quote request form at NetQuote, a service that will put you in touch with agents right in your area who can help you design an insurance package to fit our needs.
Three types of managed care plans (and the medical savings account)
Managed care today is a lot different from its early days. Not least among the changes is the range of plans there are, with three main types:
The three types are:
PPO, or Preferred Provider Organization (very common),
POS, or Point-of-Service (not very common),
HMO, or Health Maintenance Organization (the original).
There is also the MSA, or Medical Savings Account which is not really managed care, but it is similar in some very important ways.
The basic characteristics of the first three are the same. Each health insurance company has an established network of providers from which they require or encourage you to seek care. In exchange for using certain health care providers, the cost to you is significantly lower.
The differences between each managed care plan lie mainly in the degree of compensation you will receive for medical treatment outside the managed care network.
It's important in choosing the right plan for you to know the characteristics of each. We'll start with the HMO, then look at PPOs and POS plans. We'll also examine medical savings accounts, which are very similar to an IRA (yes!) and have similar tax advantages, along with the medical coverage options they provide.
Next: Health Maintenance Organizations: the best known type of managed care for many