Types of Insurance Plans
Indemnity plans (also called fee-for-service) are the most traditional type of insurance. Patients can see any provider, and the insurance reimburses a set percentage of the usual and customary charges. These plans typically have higher premiums and deductibles but offer maximum flexibility in choosing providers.
Managed care plans attempt to control costs by establishing networks of providers and requiring various forms of utilization management. The three main types are:
- HMOs (Health Maintenance Organizations), which require members to use network providers and obtain referrals for specialists;
- PPOs (Preferred Provider Organizations), which encourage but don’t require network use; and
- POS (Point of Service) plans, which combine elements of both.
Consumer-driven health plans pair high-deductible insurance with tax-advantaged savings accounts. Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs) allow patients to set aside pre-tax dollars for healthcare expenses. These plans shift more financial responsibility to patients and require billing specialists to accurately calculate and communicate patient responsibility amounts.