The Basic Types of Health Insurance in an Era of Healthcare Reform

 There are four basic types of health insurance from an operational standpoint, but with the advent of healthcare reform, their prevalence, popularity, and fates differ. In considering the types of health insurance it is important to not confuse insurance type with the metal level used for designating the actuarial value of Obamacare insurance plans. The type of insurance has more to do with the rules and regulations as stated in the policies and contracts with providers. Those regulations govern how and when the benefits can be accessed or utilized by the enrollees (plan members), the conditions and circumstances under which claims will be paid, how much healthcare providers will be paid, and how much the providers can bill the plan members.

 

The four major types of health insurance plans can be placed into major categories, managed care, and indemnity plan insurance. Health maintenance organizations (HMOs) preferred provider organizations (PPOs) and point of service (POS) plans are categorized as managed care, and as the name implies, regulate activities pertaining to benefit utilization and reimbursement to varying degrees depending upon the type of plan. Indemnity plan insurance on the other hand, regulates utilization of health benefits minimally in comparison to managed care plans, and don't regulate healthcare provider billing at all.

 

From a managed care standpoint, it is important to recognize the distinction between management of utilization of benefits and covered benefits. HMO, PPO, POS and indemnity plans all provide some common covered health benefits at varying levels, but accessibility to the benefits is what distinguishes the plan type. The legal authority of managed care plans to regulate members is stated in the policies, whereas legal authorization to regulate the healthcare providers is via signed contracts between the providers and the insurance companies which sell the plans.