Types of Health Insurance Plans and Related Benefits

• What is a base plus plan?

  A base plus plan is a two-part health insurance plan. Basic medical coverage -- for such expenses as hospitalization, surgery, physician's visits, diagnostic laboratory tests and x-rays -- is provided under the first part. There may be limits on these expenses, such as a limited number of hospital days and a surgical schedule, but no deductible or coinsurance applies to the covered expenses. The employee is reimbursed starting with the first dollar of expenses. The second, or major medical, part of the plan covers other health expenses. The coverage is broad, with fewer limits; however, a deductible is required before the employee is reimbursed for expenses.

• What are the advantages to a base plus plan?

  From the employee's point of view, base plus plans appear to provide more generous benefits because of the lack of deductibles and coinsurance in the basic medical part.

• What is a comprehensive plan and it's advantages?

  A comprehensive plan provides coverage for most medical services using one reimbursement formula. In a pure comprehensive plan, a deductible must be met before reimbursement for any covered expenses begins, and coinsurance applies to all covered expenses until the maximum employee out-of-pocket expense limit is reached. Additional covered expenses are paid in full. Because employees share from the beginning in the cost of their medical expenses when they are incurred, a comprehensive plan encourages them to use more cost-effective health care. The patient is more likely to be cost-conscious and to seek out more cost-effective health care services and providers.

• What kinds of hospital outpatient expenses are covered?

  Three kinds of care are covered: emergency treatment, surgery and services rendered in the outpatient lab or x-ray department.

• What types of services are generally covered by a group health insurance plan?

  Base plus and comprehensive plans vary by insurer, but generally cover the same kinds of services. These include:
  Professional services of doctors of medicine and osteopathy and other recognized medical practitioners
  Hospital charges for semiprivate room and board and other necessary services and supplies
  Surgical charges
  Services of registered nurses and, in some cases, licensed practical nurses
  Home health care
  Physiotherapy
  Anesthetics and their administration
  X-rays and other diagnostic laboratory procedures
  X-ray or radium treatment
  Oxygen and other gases and their administration
  Blood transfusions, including the cost of bloom when charged
  Drugs and medicines requiring a prescription
  Specified ambulance services
  Rental of durable mechanical equipment required for therapeutic use
  Artificial limbs and other prosthetic appliances, except replacement of such appliances
  Casts, splints, trusses, braces and crutches
  Rental of a wheelchair or hospital-type bed
  

A Health insurance policy is a contract between an insurance company and an individual. The contract can be renewable annually or monthly. The type and amount of health care costs that will be covered by the health plan are specified in advance, in the member contract or Evidence of Coverage booklet. The individual policy-holder's payment obligations may take several forms:

• Premium: The amount the policy-holder pays to the health plan each month to purchase health coverage.
• Deductible: The amount that the policy-holder must pay out-of-pocket before the health plan pays its share. For example, a policy-holder might have to pay a $500 deductible per year, before any of their health care is covered by the health plan. It may take several doctor's visits or prescription refills before the policy-holder reaches the deductible and the health plan starts to pay for care.
• Copayment: The amount that the policy-holder must pay out of pocket before the health plan pays for a particular visit or service. For example, a policy-holder might pay a $45 copayment for a doctor's visit, or to obtain a prescription. A copayment must be paid each time a particular service is obtained.
• Coinsurance: Instead of paying a fixed amount up front (a copayment), the policy-holder must pay a percentage of the total cost. For example, the member might have to pay 20% of the cost of a surgery, while the health plan pays the other 80%. Because there is no upper limit on coinsurance, the policy-holder can end up owing very little, or a significant amount, depending on the actual costs of the services they obtain.
• Exclusions: Not all services are covered. The policy-holder is generally expected to pay the full cost of non-covered services out of their own pocket.
• Coverage limits: Some health plans only pay for health care up to a certain dollar amount. The policy-holder may be expected to pay any charges in excess of the health plan's maximum payment for a specific service. In addition, some plans have annual or lifetime coverage maximums. In these cases, the health plan will stop payment when they reach the benefit maximum, and the policy-holder must pay all remaining costs.
• Out-of-pocket maximums: Similar to coverage limits, except that in this case, the member's payment obligation ends when they reach the out-of-pocket maximum, and the health plan pays all further covered costs. Out-of-pocket maximums can be limited to a specific benefit category (such as prescription drugs) or can apply to all coverage provided during a specific benefit year.