What is a Health Care Plan?

A healthcare plan might be better called healthcare insurance but there are some differences. Usually plan means the details of insurance offered (what they cover), and a single insurance company may offer numerous different types of plans to private individuals or to companies. When a person participates in a health care plan, they get a set of rules that define exactly what will be covered and to what extent coverage can exist. Plans exist for lots of different types of health care. Some might be restricted to vision care or dental care, and others are used for most medical care and exclude vision or dental coverage.

The typical health plan that covers most medical services first defines what type of plan it is. Some plans mean belonging to a health maintenance organization (HMO), which usually means insurance will not cover service with doctors or other medical professionals that don’t participate in the organization, though there are exceptions. Another kind of health care plan is the PPO or preferred provider organization. People usually get lower rates when they visit providers that have signed up with the plan, but they may have the option to see doctors or others who don’t participate in it, usually at a higher cost. Major medical plans are a third option in which the insurance company will pay a percentage of health care costs, usually not dependent on physician enrollment.

A few plans don’t fit fully into one category or another and are a blend of several different methods. Insurance companies may also offer several types of plans. They could have HMOs and PPOs for instance, or major medical and a PPO. It truly depends upon the insurance company.

It’s unlikely that a person’s health care plan will look identical to someone else’s, unless the two people work for the same company. Plans may offer greater or less coverage depending upon what individuals and companies who may employ them are willing to pay. Larger companies with many employees may be able to negotiate lower rates for a plan, or might be able to get more coverage, but this might also depend in part on the continued health of employees.

Amount of coverage and what people can expect to pay, especially from a health care plan purchased at work, can change on a yearly basis. Companies also can contract with different insurance companies and change this from time to time if they find better coverage for their employees or lower prices that the company will pay. Individuals participating in large systems like Medicare, or the US State Children’s Health Insurance Program (SCHIP) may also need to review several plans to find out which one seems to offer the best coverage, as do those purchasing insurance privately.

Some things to evaluate when choosing a health plan include monthly cost to participate, restrictions on what doctors are available, and things like share of cost or copayment fees. It also helps to know if a health care plan has a maximum lifetime coverage limit or if there are high deductibles that must be paid prior to coverage by the company. Sometimes paying a higher monthly fee means people get more extensive coverage with lower copayments or deductibles. However, for individuals who don’t have access to health care through work or another program, bare minimum health care plans may cost a great deal of money and they may have noted exclusions, especially in covering any conditions that pre-existed or were present prior to purchase of the plan.