Traditional Health Insurance: What, When and Why In traditional health insurance, you can choose any physician you wish and you can also decide which health service to obtain. In other formal words, traditional health insurance, usually, but not always, are major medical insurance policies issued to an employer and available to individuals for purchase and are not subject to review by the Department of Managed Health Care but by the Department of Insurance. Moreover any health care provider licensed by the Department of Insurance is under their jurisdiction. To understand it clearly you should look, if your health coverage provider’s name includes some catch words like "insurance", "assurance", and/or "indemnity", you are most likely to have traditional health insurance. It is seen for years, traditional health insurance, which is also known as indemnity or fee-for-service coverage was the norm. Under this type of health coverage, plan members and beneficiaries have total flexibility in choosing doctors, hospitals as well as other health care providers. However, plan members can go to any specialist without having to get a referral from another physician, and the insurance company doesn't get to decide whether the visit is necessary or not. On one hand, these offer flexibility to their members but on other hand, fee-for-service plans aren't always as great in practice as they are in theory. So, sometimes these create confusion to new members and sometimes even to existing plan members. Despite of all these facts, it is also seen that most people still have traditional health insurance coverage. As under these plans, your insurance usually has a deductible you must pay before the insurance applies, and you are allowed to choose your doctor whose fees are reimbursed, when his or her office bills the insurance company directly. Sometimes, you have to choose your doctor from a "preferred provider" list and pay a "co-pay fee" for each visit. These traditional health insurance plans are regulated by the Department of Insurance, which accepts and acts on consumer complaints. One good point is that in many cases the Department of Insurance is cooperative and mediates, when you file a complaint against your insurance company. Usually traditional insurance plans involve more out-of-pocket expenses for employees than managed health care plans. There are very high deductibles, usually starting at $200, before the insurance company starts paying. Once these deductibles are paid, the insurer will generally pay about 80-85 % of any doctor bills. Although, in traditional health insurance, it's good to be able to visit any doctor in the world, traditional plan insurers will generally pay only for "reasonable, justifiable and customary" medical expenses. This means, they take into account what other local practitioners charge for similar services. For example, if a plan member wants himself/herself to be operated and it costs $500, but other doctors in his/her area typically charge $400 for the same operation and treatment, then the insurer is likely to pay only $400 as the fee for the operation. This is in addition to the deductible and co-insurance they would be expected to pay. If you are an employer then you will find that the cost is also the major drawback to traditional insurance plans as there are few oversights or cost-saving measures, premiums for traditional insurance which tend to be higher than for other plans. According to the Foster Higgins, 1994, "National Survey of Employer-Sponsored Health Plans", traditional health insurance costs an average of $3,850 per employee per year. But remember this is just an average, because health insurance costs can vary significantly from state to state and sometimes from city to city as per the company rules and policies. If you are an employer and want a health insurance plan to be successful among your employees, make sure that deductibles and co-insurance do not drastically exceed what your employees can pay eventually. Otherwise you know the results at the end of the day! Because some co-pays can go as high as 50 percent, so be cautious of policies that require more than 25 percent of the cost of treatment or those continue to charge co-insurance for charges in excess of $10,000, so that you can give maximum benefit to your employees. If you are still unsure about when and why you should go for some particular plan and even not sure, whether your health care coverage is managed care or traditional insurance, it is advised to contact the Department of Managed Health Care at (888) HMO-2219 or the Department of Insurance at (800) 927-4357. © 2004 by Roger Lacocoa,  Affordable Health Insurance Quotes. ~~~~~~~~~ About the author: Roger Lacocoa is a professional consultant with Affordable Health Insurance Quotes, specializing in the areas of health, life and disability insurance. Disclaimer: All content in this website is provided for educational purposes only. The publishers of this website do not give any warranty as to the accuracy or completeness of the content on same website. No part of this website or any material appearing on the site may be reproduced, stored in or transmitted on any other website without written permission. All content is original and copyrighted.