Both fee-for-service and Both fee-for-service and managed care cover managed care cover medical ,surgical, and hospital medical ,surgical, and hospital expensesexpenses

Can also cover prescription Can also cover prescription drugs and dental drugs and dental

Both pay premiums usually Both pay premiums usually monthlymonthly

Difference = freedom to choose Difference = freedom to choose your health care provider and your health care provider and how they are paidhow they are paid

Fee-For-Service PlansFee-For-Service PlansAlso called an Also called an indemnity planindemnity plan

*Definition: Type of health *Definition: Type of health insurance in which you pay for insurance in which you pay for health services as you receive health services as you receive them and submit a claim to the them and submit a claim to the insurance company for insurance company for reimbursement of covered reimbursement of covered expensesexpenses

Who are fee-for-service plans for?Who are fee-for-service plans for?They offer immediate medical treatmentThey offer immediate medical treatment

-So those who don’t like to deal with the -So those who don’t like to deal with the paperwork and waiting that accompanies 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 Those who don’t go to the doctor very

often at all and hate to waste money on often at all and hate to waste money on high premiums will find that this is the high premiums will find that this is the perfect choice!perfect choice!

Families and women who need check ups Families and women who need check ups regularly won’t find the fee for service regularly won’t find the fee for service plan economical plan economical

CostsCostsAll fee-for-service plans have a deductibleAll fee-for-service plans have a deductible

* * A A deductibledeductible is the amount you agree to pay is the amount you agree to pay before the insurance company pays anythingbefore the insurance company pays anything

For health insurance you pay a deductible for For health insurance you pay a deductible for the year not per incidentthe year not per incident

Deductibles = $100-$300 to $500 for familyDeductibles = $100-$300 to $500 for familyThe higher the deductible the lower the The higher the deductible the lower the

premium premium 80/20 coverage: your insurance pays 80% and 80/20 coverage: your insurance pays 80% and

you pay the remaining 20% [your coinsurance]you pay the remaining 20% [your coinsurance]

*Example: 80/20 coverage with $100 bill

-You pay $20 and your insurance pays $80

--HoweverHowever, 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)

LimitsLimitsSet a maximum out-of-pocket Set a maximum out-of-pocket

amount that you pay per yearamount that you pay per yearOnce you pay the amount the Once you pay the amount the

insurance company will pay insurance company will pay 100% of additional charges100% of additional charges

Plus you no longer have to pay Plus you no longer have to pay coinsurance for that yearcoinsurance for that year

Common maximum over a Common maximum over a lifetime is $2 million lifetime is $2 million

Managed Care Managed Care PlansPlans Also called Also called prepaid plansprepaid plans

You pay for health care coverage in You pay for health care coverage in advanceadvance instead of paying for services as you use instead of paying for services as you use them them

Don’t have to submit claim formsDon’t have to submit claim forms Covers the same kinds of health care Covers the same kinds of health care

services as services as fee-for-service plansfee-for-service plans Capitation: Capitation: cost-control policy in which cost-control policy in which

doctors and hospitals are paid a doctors and hospitals are paid a fixedfixed amount per year for each insured patient, amount per year for each insured patient, no matter what services they provideno matter what services they provide

HMOHMO**Managed care health insurance plan that Managed care health insurance plan that

charges a set amount for each member charges a set amount for each member each each yearyear in exchange for providing in exchange for providing medical services at no extra costs or for a medical services at no extra costs or for a small small copaymentcopayment, no matter how often you , no matter how often you see your doctorsee your doctor

CopaymentCopayment: the specific amount you pay for : the specific amount you pay for particular services, regardless of the cost of particular services, regardless of the cost of those servicesthose services

You must choose a You must choose a primary care physicianprimary care physician in your planin your plan

*Doctor in a managed care health plan that *Doctor in a managed care health plan that you select to coordinate your care and refer you select to coordinate your care and refer you to specialistsyou to specialists

PPOPPOManaged care health Managed care health

insurance plan that allows insurance plan that allows you to choose providers you to choose providers outside the plan if you pay a outside the plan if you pay a larger part of the costlarger part of the cost

Doesn’t require you to get Doesn’t require you to get referrals from a primary care referrals from a primary care physician physician

POSPOS(Point of Service)(Point of Service)

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