Health Insurance Plan

What is a health insurance plan?

A health insurance plan, or health service plan, is generally distinguished from health insurance by the type of promise that is made in the binding contract between the insured and the issuing company.

Typically, a health insurance policy promises to pay a health care provider for the care given, or promises to reimburse the insured for the expense of paying the health care provider. Health plans or health service plans typically promise in their contracts to organize and contract with health care providers and arrange for the provision of the health care. In this arrangement, the insured or plan member pays premiums, just as with insurance, but the member is not reimbursed for expenses, because beyond a fixed deductible and generally low co-pay, the member has no responsibility for payment. In these arrangements, the health care provider, such as a doctor or hospital, promises to provide the care in exchange for prearranged charges negotiated between the provider and the plan on an annual basis.

These financial arrangements between plans and providers can be very complicated, including such arrangements as "capitation" which provides a fixed fee per plan member regardless of amount of care, or "DRGS" (disease or diagnostic related groups), which are a fixed charge based on diagnosis regardless of the amount of care actually given. Further, such arrangements may include cost sharing, profit sharing, incentive bonuses, pooled resources and other complicated financial arrangements. In the past, the details of these arrangements have been kept secret from consumers, but state laws in a number of states are starting to change that situation.

For more information or a quote on health insurance (click here) complete our consumer profile form and locate a professional in your area.

InsBuyer helped over 4.2 million consumers with insurance related needs in 2004 and over 720,000 insurance quotes were requested for car insurance, home insurance, life insurance and health insurance. Thank you for letting us help you find affordable insurance.