Group Health Insurance Plans Offer Cost Advantages
Let’s face it. Given the choice, most people would prefer to get their health insurance coverage from a group plan provided by their employer. For one thing, the premiums will be less expensive each month since the employer pays a percentage and deducts the employee’s share from his paycheck. There’s also less paperwork and no need to seek out and consult an agent. Someone in the company, usually within Human Resources, has been schooled to discuss the group plan coverage and costs with employees. From this perspective, group health insurance is the best of all choices.
Group health insurance plans can be considered as ‘indemnity’ plans, ‘fee-for-service’ plans or ‘managed care’ plans. They can be differentiated from each other by the way they provide health care benefits. The primary differences are the choice of providers offered, out-of-pocket costs for covered services and how bills get paid. Those insured under indemnity plans normally gain a wider choice of doctors including specialists; hospitals; and other health care providers. Managed care plans generally offer less out-of-pocket costs and paperwork.
Managed care plans currently represent the majority of popular group health insurance plans. The three basic plan types include HMO, PPO and POS. HMO or Health Maintenance Organization plans result in lower costs to members but limit ones choice of physicians and hospitals. Plan members are asked to select a primary care physician for regular care and ask him for referrals to any specialists required. The HMO offers a broader scope of preventive health care options . However, you might be required to reach a deductible amount before insurance payments apply. Co-payments will also be lower with an HMO. The downside is that if you select providers not in the plan’s network, you’ll have to pay the bills yourself.
The PPO or Preferred Provider Organization plan wants you to use the plans list of available doctors and hospitals who have been contracted to provide health care to members at a lower cost. There will also be some level of co-payments for you to pay. Payments for providers who are outside the plan’s network are paid at a lower percentage than those listed for the plan.
Despite any perceived disadvantages that limit your choice of providers, these plans are very beneficial from the cost perspective in today’s climate of rising health care costs.