Options within Each Type of Health Insurance

Whether you have group health insurance or individual health insurance, these plans also have further options to choose from.

Fee-for-Service (Indemnity) Insurance is an older type of health insurance not used as much anymore. You can go to any doctor or hospital you wish but the insurance plan pays a smaller portion of the medical bill than a managed care plan with you having to pay the remaining amount. And your cost to buy this type of insurance is higher than most managed care plans.

Managed Care Plans are the more common plans in use today. The insurance companies save themselves and you money by creating a network of health care providers who have contracted with the insurance companies for lowers fees charged for services. There are generally two types of managed care plans - PPO (Preferred Provider Organization) and HMO (Health Maintenance Organization). The two differ mostly in your freedom to seek health care providers outside the network. PPO plans will usually let you seek medical care outside the network but they will pay much less of the medical bill than if you stay inside the network whereas HMO plans require you to stay inside the network and pay for no services outside the network.

Association-Based Health Insurance is that often offered to members of some types of organizations such as religious, professional, or trade organizations.  In these circumstances the organization usually lowers the cost of the insurance to members simply by providing a larger group of people for the insurance company to spread the risk across – as mentioned before, the more people paying the cheaper should be the cost. 

High-Risk Pools are a newer form of insurance provided by some states now for people who are unable to obtain insurance because of serious pre-existing medical conditions. Usually you cannot seek this type of insurance unless you have been turned down for coverage by insurance companies.

Background
Types of Health Insurance
Options within Each Type of Health Insurance: You are here.
Buying Health Insurance
How Health Insurance Works
Glossary of Terms