 Both fee-for-service and managed care cover medical,surgical, and hospital expenses  Can also cover prescription drugs and dental  Both pay premiums usually monthly  Difference = freedom to choose your health care provider and how they are paid

Fee-For-Service Plans  Also called an indemnity plan *Definition: Type of health insurance in which you pay for health services as you receive them and submit a claim to the insurance company for reimbursement of covered expenses

Who are fee-for-service plans for?  They offer immediate medical treatment -So those who don’t like to deal with the paperwork and waiting that accompanies many health insurance plan claims may many health insurance plan claims may appreciate this service. appreciate this service.  Those who don’t go to the doctor very often at all and hate to waste money on high premiums will find that this is the perfect choice!  Families and women who need check ups regularly won’t find the fee for service plan economical

Costs  All fee-for-service plans have a deductible * A deductible is the amount you agree to pay before the insurance company pays anything * A deductible is the amount you agree to pay before the insurance company pays anything  For health insurance you pay a deductible for the year not per incident  Deductibles = $100-$300 to $500 for family  The higher the deductible the lower the premium  80/20 coverage: your insurance pays 80% and you pay the remaining 20% [your coinsurance]

* Example: 80/20 coverage with $100 bill -You pay $20 and your insurance pays $80 -However -However, if the doctor charges an unreasonable price for the treatment let’s say $110 you will have to pay the $20 plus the extra $10  Reasonable and customary charges *Fees for each medical treatment that the insurance company determines are normal in your geographic area  If your doctor charges more than the reasonable amount you will pay for the extras Costs (cont)

Limits  Set a maximum out-of-pocket amount that you pay per year  Once you pay the amount the insurance company will pay 100% of additional charges  Plus you no longer have to pay coinsurance for that year  Common maximum over a lifetime is $2 million

Managed Care Plans  Also called prepaid plans  You pay for health care coverage in advance instead of paying for services as you use them  Don’t have to submit claim forms  Covers the same kinds of health care services as fee-for-service plans  Capitation: cost-control policy in which doctors and hospitals are paid a fixed amount per year for each insured patient, no matter what services they provide

HMO * Managed care health insurance plan that charges a set amount for each member each year in exchange for providing medical services at no extra costs or for a small copayment, no matter how often you see your doctor  Copayment: the specific amount you pay for particular services, regardless of the cost of those services  You must choose a primary care physician in your plan *Doctor in a managed care health plan that you select to coordinate your care and refer you to specialists

PPO  Managed care health insurance plan that allows you to choose providers outside the plan if you pay a larger part of the cost  Doesn’t require you to get referrals from a primary care physician

POS (Point of Service)  Managed care health insurance plan that requires you to get referrals from a primary care physician within the plan but will pay part of the cost of providers outside the plan