Advantages of Managed Care Plans

Health Insurance Plans are of two kinds. We have the traditional health insurance plan also known as indemnity health insurance plan and the Managed Care Plans also known as HMOs, PPOs and POS.

Indemnity health insurance plans are called the traditional health insurance precisely because it is the first health insurance that was created to serve the health insurance needs of the public.

Managed Care Plans on the other hand, was created to give the cheapest health insurance plans to the public in order that those who cannot afford indemnity health insurance plans can still have access to health insurance, through managed care plans. Cheap and very affordable health insurance plans is the reason for the existence of Managed Care Plans. The planning in the creation of Managed Care Plans to enable them to give the lowest rate of health insurance coverage to the public will have to involve themselves, their insured clients and the medical providers and facilities.

It runs this way; the insurance companies will talk to doctors, clinics and hospitals and ask them to become part of the insurance companies network of medical providers whereby all the company’s insured clients will be made to exclusively avail of their medical services which in effect will give these medical facilities and providers a captured market.

In return, these networks of medical providers and facilities will have to give big discounts to the insurance companies in relation to their cost of medical services provided to their insured clients. On the other hand, the insurance companies will now offer the public with cheap health insurance on the condition that they will only avail of the medical services of the insurance companies’ network of medical providers.

So what happens, the insured client is happy that he pays cheap for his or her health insurance coverage but only on the condition that he or she has to avail of the company’s network of doctors, clinics and hospitals for his medical needs. On the other hand, the doctors, clinics and hospitals that are part of the insurance companies’ network of medical providers are also happy to give big discounts to the insurance company for their medical services to the companies’ insured clients because they are assured a steady stream of patients being supplied to them by the insurance companies.

How about the insurance companies, you might ask. Well, I think they also will be happy giving their clients very affordable type of health insurances. Besides, they will be making good business for themselves by receiving cheap payments from their insured clients and paying cheaper their medical provider and facilities. This is the beauty of Managed Care Plans; everybody seems to benefit from it.

But how about if the insured client travels to other parts of the country where his insurance company has no network of medical providers and facilities and he got sick? I think that if this does happens, he will have to pay cash up front, since medical providers and facilities that are not part of any insurance networks most often will not honor his Managed Care Plans and he will be required to pay the entire amount of his doctor’s fee and cost of hospitalization. But I think this will not be a problem since today, nearly all parts of the country have insurance networks to serve you.