Health Care Plans and Providers
The insurers of health care are not only traditional stock and mutual companies, and Blue Cross and Blue Shield, but also the health maintenance organizations and preferred provider organizations formed by hospitals and physicians to deliver health care directly to enrollees in their plan.
Commercial Insurers...Commercial insurers traditionally provide coverage on a reimbursement basis. Reimbursement plans pays benefits directly to the insured, who is responsible for paying the providers of medical services.
Blue Cross and Blue Shield...Blue Cross and Blue Shield are different than commercial insurers in that the insurer (Blue Cross and Blue Shield) pays the provider directly for medical treatments given the insured, instead of reimbursing the insured.
Blue Cross and Blue Shield plans are called prepaid plans because the plan subscribers (policyholder) pays a set fee, usually each month, for medical services covered under the plan.
Types of Coverage and Benefits
- Hospital daily room and board
- Outpatient services for minor surgery
- Accidental injury
- Medical emergencies
- Diagnostic testing
- Physical therapy
- Kidney dialysis
- Chemotherapy
Health Maintenance Organizations (HMOs)
Health maintenance organizations operate on a service basis and provide prepaid doctor and hospital care. The objectives of HMOs are to reduce medical expense by:
- Stressing preventive medicine through physical exams and diagnostic procedures
- Reducing the number of unnecessary hospital admissions
- Reducing the average number of days per hospital visit
- Reducing duplication of benefits
- Saving on administrative costs
Preferred Provider Organizations (PPOs)
A PPO is made up of various hospitals and private physicians in an area, who agree to provide services to the insurer's clients at a predetermined price. Inreturn, the insurer designates these doctors and hospitals as preferred providers.
If an insured seeks treatments from a preferred provider the coverage for the service rendered is 100 per cent minus a nominal copayment for each office visit or hospital stay. If the insured elects to receive treatment from a non preferred provider then the reimbursement benefits will be reduced to the usual eighty per cent.
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