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Insurance
Types of Plans
By the Ohio Department of Insurance
Traditional insurance:
A traditional health plan is sometimes called "fee for service" because the insurance company pays the bills after you receive the service. Such traditional health insurance is the main focus of this article. Here's how this kind of coverage usually works:
- There is no connection between the insurance company and the people who provide your health care.
- You can use any doctor or hospital.
- The medical bills are sent to the insurance company.
- You will likely have to pay a deductible before the policy begins to pay and copayments each time you have a claim.
- If the policy pays less than the full bill, you may be responsible for paying the rest.
Managed care:
State law gives the Ohio Department of Insurance regulatory authority over Health Insuring Corporations (HICs). These are defined as prepaid managed care insurers that perform two functions: They provide health care and then pay the bill (assume risk).
Most HICs in Ohio are known commonly Health Maintenance Organizations (HMOs). So if you get your care from an Ohio HMO, don't let the term HIC throw you if you hear it. Other types of managed care organizations can also qualify as Health Insuring Corporations.
Read below for a brief description of how managed care companies work.
Health Maintenance Organization (HMO):
- HMOs provide health services through a network of doctors, hospitals, laboratories, etc.
- Network providers may be either HMO employees or have some other contract arrangement with the HMO.
- You must receive your care from network members, unless you have a medical emergency.
- You must choose a network doctor as your primary care physician (PCP) to oversee (manage) all your health care.
- Whenever you need health care, you must first consult your PCP; then you may be referred to a specialist approved by the HMO.
- Network providers may bill you only for your normal copayments.
Preferred Provider Organization (PPO):
- PPOs are groups of doctors, hospitals, and other health care providers that have contracts with health insurance companies.
- PPO providers agree to serve the company's members and charge negotiated rates - these are the company's preferred providers.
- Some employers combine the PPO with a traditional plan to give you a choice of using other providers.
- To encourage you to use the PPO, the PPO usually has lower copayments than the traditional insurance plan (this arrangement is often called Point of Service).
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