Health plans, sometimes referred to as 'Managed Care' are binding arrangements intended for the provision of personal health care coverage in which a health care provider like an HMO or PPO, other type of doctor-hospital network or insurance company acts as an intermediary between the person seeking care and the physician. Health plans vary in type, coverage, benefits and cost, here's a quick summary and some things to think about when researching a health plan:

Benefits of participating in a Health Plan

Ever heard the old adage: 'economies of scale'? Health plans come in a number of forms, but when speaking to companies enrolling their employees in managed care plans, they are in essence shifting the financial risk of the high cost of individual health care coverage from the individual themselves to the group as a whole with the basic assumption that not all individuals will utilize the health plan to its fullest extent and thus lower the cost of health care for the group.

There are of course also the obvious benefits of a health plan including the ability to seek medical attention should the situation arise and depending on the type of health plan, you could have a large portion of these medical expenses covered by the health plan itself, or potentially all of your expenses covered.

Health plan provider types include:

Health Maintenance Organizations (HMOs) - these are prepaid health care providers, offering specific services to individuals, instead of a dollar amount guaranteed by an insurance policy. In this scenario, doctors are paid a set amount monthly for each participating patient, regardless if the patient utilizes the services or not.

Preferred Provider Organizations (PPOs) - this is a network of doctors and hospitals that agree in advance to specific guidelines and a fee schedule in return for receiving a specific number of patients.

Point of Service Plans (POSs) - similar to PPOs, but in this case patients are allowed to go 'out of network' for treatment, but usually at a higher cost.

As you are doing your research on health plans and managed care, you will find that many doctors criticize these systems, citing that managed care takes away their freedom to make important treatment decisions as they are more often that not motivated by economics and are therefore less likely to consider patients as individuals and more likely to base their decisions on the potential dollar value to their hospital. Sad, but true.

Getting your head around various health plans, their features, benefits and options can be difficult at best, www.retireology.com is here to help answer some of the important questions and give you relevant info on health plans!