Health Insurance Matrix

Topics: Preferred provider organization, Insurance, Health insurance Pages: 7 (2127 words) Published: July 21, 2014

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Health Insurance Matrix

Origin: When was the model first used?
What kind of payment system is used, such as prospective, retrospective, or concurrent? Who pays for care?
What is the access structure, such as gatekeeper, open-access, and so forth? How does the model affect patients? Include pros and cons.
How does the model affect providers? Include pros and cons.
Indemnity
In 1932 the American Medical Association (AMA) adopted a strong position against prepaid group practices, favoring instead indemnity-type insurance that protects the policyholder from expenses by reimbursement (Jones & Bartlett, 2007). As one of the first health policies in the U.S., indemnity plans are considered traditional health plans. Indemnity insurance plans have three options. Two of them are reimbursement plans (Howell, R., 2014). One typically covers 80 percent while the patient covers 20. The other option covers 100 percent. The third option pays the insured a certain amount each day for a maximum number of days. Indemnity plans are fee-for-service plans (retrospective).

With an indemnity plan the patient pays for care. Afterwards the patient must submit a claim in order to be reimbursed.

Indemnity plans are non-network based plans with open-access. This gives insured individuals \ flexibility when choosing doctors, hospitals, and health care facilities. No primary care physician (PCP) is necessary. No referrals are needed.

Indemnity plans provide patients with flexibility and control over their medical care. No PCP must be selected. No referrals are needed to obtain services. The drawback however, is that patients must submit claims in order to receive reimbursement for services. This can take time. Indemnity plans only reimburse services covered by the insurer. Services not covered will require full payment from the patient.

Providers can require the costs for services up front to guarantee they are getting what they charge. Providers are not required to help patients with the necessary paperwork needed for reimbursement. This potentially saves providers time and resources if they decide to ask for funds in full before service. The drawback to indemnity plans is that patients may not have all the funds required to front the bill. Expensive services can detour patients from seeking care. Consumer-directed health plan

Consumer-directed health plans (CDHP) were the result of public backlash against managed care and the rise in health care expenditures (Bundorf,K. M., 2012). CDHP’s were first introduced in the late 1990s. CDHP’s aim to control costs by putting responsibility for health care decisions into the hands of patients. 

Patients with a CDHP are required to pay for medical services in a fee-for-service type payment plan (retrospective). Patients pay for costs out of pocket until a maximum out-of-pocket limit is met. The insurance company covers additional costs after the maximum limit is reached. The insurer fully reimburses the medical provider. Unless a claim is submitted (AET), in which case only a portion is reimbursed. With a CDHP the patient is required to pay 100 percent of the pharmaceutical and medical expenses. Once the yearly deductible is met, the patient will is only required to cover a certain percentage of costs. The percentage varies depending on the provider. Of course, there are plans that cover 100 percent of their in-network costs. Patients with a CDHP gain access to a network of providers that their insurance company contracts with. The patient is not required to choose a primary care physician, and is not required to obtain a referral to see a specialist for medical care (Aetna, 2012).

CDHP’s offer increased consumer control over health care dollars (Furlow, E., n.d.). Patients have better support tools (online, phone). They also have more power to make decisions. Alternatively, increased decision making ability allows patients to forgo care. This...

References: Austin, A. & Wetle. V. (2012) The United States Health Care System, Combining Business, Health, and Delivery. (2nd ed.) Upper Saddle River, NJ: Pearson Education
Barsukiewicz, C.K., Raffel, M.W., & Raffel, N
Stevens, S. (2005). Pros and Cons of Health Savings Accounts. Retrieved from http://www.forbes.com/feeds/mstar/2004/04/08/mstar1_11_14978_132.html
Kiplinger
Gutske, C. (2013) Pros and Cons of Health Insurance POS Plans. Retrieved from http://www.bankrate.com/finance/insurance/pros-cons-health- insurance-pos-plans.aspx
Jones & Bartlett Publishers
Howell, R. (2014) Indemnity Health Insurance Definition. Retrieved from http://www.ehow.com/about_7290655_indemnity-health-insurance- definition.html
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