Health Insurance Guide - Federal Long Term Health Insurance Section

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Preferred health insurance provider organization will provide the insured members of the group a substantial discount below their normal rates. This is mutually beneficial as the health insurance insurer is billed at the reduced rate when its insured use the services of the "preferred" provider, the provider benefits because almost all insureds use only providers who are members. Those taking out this type of health insurance should benefit, as lower costs to the insurer will likely result in lower rates of premium increase.

In health maintenance organizations, the policy holders do not utilize members of the organization as their health care providers and therefore receive little or no benefit. PPO members are reimbursed for utilization of non-preferred providers but at a rate which can include co-payments, higher deductibles, and lower reimbursement percentages.

Health insurance treatment reviews are also common where the treatment provided can be scrutinized ensuring appropriate care has been provided rather than with the intention to increase reimbursement, many providers resent this and see it as second guessing their judgement.

Health Insurance Pre-certification is a requirement in which scheduled (non-emergency) hospital admissions and outpatient surgery in some cases must have prior approval of the insurer.

Medical health insurance inflation in the U.S. saw a reduction in the 1990's and many credited this to PPO's, however the situation has changed somewhat as most providers are now members of most of the major preferred provider organizations sponsored by major insurers and administrators. This has resulted in the competitive advantages outlined being virtually reduced or almost entirely eliminated and consequently medical inflation in the U.S. is again advancing ahead of general inflation.

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