2 Private insurance
“US Healthcare system Chapter 6” by Deanna L. Howe, Andrea L. Dozier, Sheree O. Dickenson, University of North Georgia Press is licensed under CC BY-SA 4.0
2.1 LEARNING OBJECTIVES
By the end of this chapter, the student will be able to:
- Define managed care
- List the pros and cons of managed care
- Distinguish the primary types of health maintenance organizations
- Discuss how managed care impacts healthcare
- Explain private insurance
- Explain problems associated with Fee-for-Service healthcare plans
- State questions to consider before deciding on a healthcare plan
- Discuss the benefits of worker’s compensation insurance for employees
2.2 KEY TERMS
- Health Maintenance Organization (HMO)
- Exclusive Provider Organization (EPO)
- managed care
- medical underwriting
- Point of Service plan (POS)
- Preferred Provider Organization (PPO)
- provider networks
- worker’s compensation insurance
- Private Insurance
2.3 INTRODUCTION
Healthcare coverage for average Americans has been much discussed over the years. Private insurance and managed care organizations are often confusing to consumers. This chapter will provide a brief summation of private insurance and four major types of managed care organizations. These four major types of managed care organizations are as follows: Preferred Provider Organizations (PPOs), Point of Service plans (POS), Health Maintenance Organizations (HMOs), and Exclusive Provider Organizations. The chapter will include discussion on the advantages and disadvantages of managed care options. Finally, there is discussion of worker’s compensation insurance.
2.4 FEE-FOR-SERVICE
Fee-for-Services plans were the staple of healthcare service plans in the U.S. before the advent of private insurance and managed care organizations. Fee-for-service is a method for which healthcare providers are paid for each individual service rendered. Payment can be from an individual or through a health insurance plan. Treatments or procedures that were deemed necessary by the healthcare provider were often conducted without approval from insurance agencies (U.S. Legal, 2019). This caused discord between healthcare providers and insurance companies who frequently disagreed on prescribed healthcare treatments. This conflict often resulted in delayed consumer medical care. Private healthcare insurance and managed care organizations would eventually change the way healthcare services were offered and payments for services were received.
2.5 PRIVATE INSURANCE
Healthcare coverage not sponsored by the government is known as private insurance. Many individuals have private insurance through their employers. In fact, approximately 60% of non-elderly Americans do so (Anderson, 2018). An employer sponsored private insurance policy charges employees a fee for their insurance coverage. However, many companies cost share and pay a significant amount of employee premiums. This fee is usually deducted from the employee’s paycheck. There is oft