There are two common forms of Health Insurance: Scheduled and Comprehensive. Scheduled Insurance pays according to a Schedule of Benefits while Comprehensive Insurance pays a percentage of healthcare costs. Both of these types have pros and cons and it is essential that the prospective insurance buyer know and understand the differences.
Scheduled Health Insurance is not meant to replace Comprehensive Insurance, but many people opt for this since the premiums cost less and there are no deductibles or co-pays.
This type of insurance has a yearly benefit maximum based on the plan selected. Some plans will only pay out a total of $1,000 per year, regardless of the policy holder’s medical expenses. This type of insurance is not beneficial in cases of catastrophic illness or injury.
Scheduled Health Insurance is set up to provide basic access to healthcare such as office visits. The payment is made to the policy holder based on a schedule of benefits. Although you can see whatever doctor you want for any condition, typical plans limit the number of office visits per year based on a person’s age, for example; five visits for children and ten for adults. The payment would be a set amount such as $65 per office visit regardless of the actual cost. The policy holder is then responsible for any physician charges above this payment. Hospital and surgical benefits are set up the same way: a set payment per claim.
Comprehensive Health Insurance has higher premiums and the policy holder costs are subject to deductibles, coinsurance and co-pays. The deductible must be met before you receive any benefits. Deductibles can range from $0 to $5,000. Co-pays are the amount you must pay every time you see a doctor and are typically $10-$30 and there are no limits on the number of visits. Coinsurance is the percentage of a charge you must pay for a service. The average plan is 80/20 with the policy holder paying 20% of charges. The Out of Pocket refers to the total amount you have to pay out of your own pocket per year. Once this amount has been reached most plans no longer require co-pays or coinsurance for that plan year. This makes the Comprehensive plan beneficial for catastrophic illness or injury.
Comprehensive plans have a specific set of doctors and hospitals that you must use. If you don’t utilize this network of physicians, benefits will be limited or you will have to pay all the charges yourself. Comprehensive plans also have long lists of exclusions and limitations. There are some conditions that these plans will exclude, for example: TMJ, infertility and any charges having to do with obesity.