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SolveYourProblem
Article Series:
Health Insurance
Traditional
Health Insurance Essentials
The fee for service health coverage, also
called indemnity, is the most traditional type of health insurance
and was the usual standard. People with these plans had the
freedom to see any doctor or health care provider they chose.
There were no needs for referrals of any kind and you didn’t
have to ask permission before seeking a doctor out. The good
news is that this type of care is still here today and hasn’t
changed. This seems like a great plan, and it is for those
who just hate to have to ask others what they have to do. For
many people, the price and out of pocket cost is too much compared
to a managed health plan that is more restrictive. Traditional
plans involve way more out of pocket expenses and the insured
end up paying at least 20% of all medical expenses, including
any emergency or hospital bills. That is on top of a monthly
premium, 20% of all medications, and at least a $200 deductible.
So, in
theory it is great to have freedom even if it comes at
a higher cost to be able to see any doctor in the world. The catch is the medical insurer will only pay for “reasonable
and customary” costs, so if a specific procedure or treatment
costs you $500 but all the other local doctors are charging
$300. You now have to pay the $200 difference on top of your
co-pay, deductible and premium. That $200 is not even looked
at as part of your plan; it is just a waste of cash. They can
get away with this because most doctor take managed care, which
is lower in cost and charge. So the doctor’s rates are lower,
and effect what the traditional insurance carrier will pay
extra. This type of insurance is also a negative for employers.
There is nowhere to save money on these plans and the premiums
are higher, so employees have no desire to get involved. If
they do decide they have no choice and have to take it, they
pay out way more money than if the employer had managed care
at a group rate.
Traditional
fee for service health care costs about $4000
per year, if not more in some cases. Although many argue that
you can’t look at figures because prices and costs vary from
state to state, so does economics and it all balances out.
For wage verses benefit of service, this plan is the most expensive
and cost the most out of pocket expenses for the employer and
employee, not to mention the poor individual holder who has
a higher rate to pay anyway. Many persons will opt to have
a higher deductible for a lower monthly premium. But many people
don’t require $1000 or more per year in medical needs, so they
never catch a break or benefit from the plan at all. This person
will be paying a premium and all out of pocket expenses. Many
common diseases such and diabetes and asthma may also not be
covered on these plans, traditional plans don’t tend to cover
many long-term illnesses. Make sure to know what the set maximum
for a particular procedure is. If your policy has a maximum
lower than your portion you could be left picking up the tab.
How
much paperwork is involved with type of plan? Traditional
indemnity plans may require your employees to file claim forms
for reimbursement and if not filed in a specified time may
not pay for the service. If you are not a paper person with
plan you will need to learn to be fast or you will pay more.
Out-of-pocket expenses: Know the plan's deductibles, co-payments,
and maximum annual and lifetime payouts. Also make sure you
know if there are different maximums for different types of
care. If you need to seek a mental health professional is the
amount allowed spent different than for plane medical? Find
out if other people were satisfied with this type of plan or
the company who offers it. You can also check with the Better
Business Bureau to see if any claims have been filed against
them. You can even ask the plan to provide you with their latest
member satisfaction survey to see if people are truly happy.
The best course of action in today’s market is managed care
it saves the most. Traditional insurance just isn’t as cost
effective as it once used to be. Click here to to view health insurance quotes, compare plans side-by-side and apply for the most affordable health insurance within your budget. I did this myself (June 17, 2011) to change my health insurance policy. Saved me $84 per month (or $1,008 per year). It's my SolveYourProblem recommendation.
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by SolveYourProblem.com
: 2006
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