There is usually a deductible or co-payment associated with traditional indemnity insurance. This means, for example, that you might pay the first $250 or $500 in charges each year or perhaps might pay 10 percent or 20 percent of the fees. There may be limits in the policy, such as hospital room and nursing costs, treatment for psychological problems, a maximum dollar amount that will be paid or limitations of a physician's fees to the "usual and customary."
An employer will often have a plan for general insurance coverage for each employee.
Managed Care Plans Managed care is usually thought of as a situation where an individual pays either a fixed fee for a certain set of services or sees a physician who has agreed to discount his or her fees for particular services.
There are many variations of Managed Care plans:
• HMO (Health Maintenance Organizations). These are prepaid health plans that require you to use a specific
network or group of provider physicians, hospitals and labs. For a fixed fee each month, HMOs provide care
specified by your contract. This care may or may not be all-inclusive, so it is important to read and
understand the contract of your particular HMO. For instance, some HMOs have no outpatient prescription
drug benefit. In an HMO, you are usually required to select one physician as your primary or family doctor.
