In the current marketplace, there are many insurance plans to choose from. This choice can often be overwhelming if you aren’t very familiar with the types of insurance or are purchasing insurance yourself for the first time. One of the biggest decisions you will make when choosing a health insurance plan is whether you will use indemnity insurance or managed health care insurance. Both types of plans have pros and cons, and the decision between the two ultimately comes down to your unique circumstances.
What Is Indemnity Insurance?
Indemnity insurance is also referred to as a “fee-for-service” plan. When most people think of health insurance, they think of indemnity plans. After you have received medical care, you will pay your deductible. Once you have met your deductible the insurance company will cover the rest of the bill based on a fixed fee amount they established for the cost of care. You submit your bill to the insurance company as a claim and they will then pay for the care, minus your deductible and co-pay.
- Pro: You will be able to choose your healthcare provider without restrictions.
- Con: The reimbursement plan often requires a lot of paperwork and your claims may be denied.
What Is Managed Healthcare?
Managed healthcare includes Health Maintenance Organizations (HMOs), Preferred Provider Networks (PPNs), and Point-of-Service Plans (POS). Managed healthcare plans offer a network of providers including doctors, clinics, and hospitals that work directly with the insurance company. When you receive medical care, the provider files the paperwork with the insurance. With managed healthcare, the fees are established, usually at a discount, and there is no worry your insurance claim will be denied because it comes directly from the provider.
- Pro: Healthcare costs are lower because providers will offer discounts to in-network patients.
- Con: Your choices will be limited to which provider you can you see based on the network.
Deciding Which Is Right For You
Both indemnity insurance and managed healthcare plans have benefits for their insured. Deciding between the two comes down to a variety of personal factors and medical care needs including:
- If you have a primary care physician or specialist that you want to continue seeing: If you do, you are better off sticking with a managed healthcare they use.
- Your budget for monthly medical care expenditures: If you have a limited budget or seek medical treatment often, you may want to choose a managed healthcare plan.
- The amount and type of medical care you need: If you need to see a variety of specialist providers frequently, you are better off sticking with indemnity insurance so that you can access the care you need without network limitations.
- Your location and mobility. If you move around a lot or travel for work, you are better choosing an indemnity plan so you can get care wherever you are located at the time of illness or injury.
Ultimately, there is no right plan for everyone.
Where To Purchase Indemnity Or Managed Care Insurance
You can purchase both types of insurance on your state’s marketplace, the private marketplace or directly from the insurance company. Most providers offer both types of insurance. You will also need to do your research on each plan to assess their coverages and costs. At PHMP, we can help. We know how important purchasing the right insurance plan is to protect you and your family. We’re here to answer any questions you may have about the different policies available and provide you with the information you need to make an informed choice. Contact us today to learn more.