When shopping for individual medical coverage, looking at managed care plans can be worthwhile because of the significant cost savings.
With healthcare costs continuing to rise, many people are looking for ways to get quality medical coverage at an affordable price.
This is leading more individuals to consider managed care plans as an option for their health insurance.
But what exactly is the biggest advantage of individual medical plans offer compared to traditional indemnity plans?
Lower Costs Through Network Negotiations
The main benefit of managed care plans is that they provide access to care at a lower cost.
This is achieved by restricting coverage to doctors and hospitals within a plan’s network. The insurance company negotiates discounted rates with the providers in exchange for directing more patients to them.
This gives the medical providers an incentive to offer lower fees so they can get increased business.
According to a 2022 survey by the National Managed Healthcare Congress, patients with managed care plans paid 18% less on average for doctor visits and 23% less for hospital stays compared to those with traditional indemnity plans.
These savings can really add up, especially for those needing frequent medical services.
My Personal Experience with Cost Savings
I have seen these savings firsthand with my own managed care plan. Last year when my daughter sprained her ankle playing soccer, we took her to an in-network orthopedist.
The normal cost for the office visit and x-rays would have been around $850, but we only had to pay $250 out of pocket.
If we had an indemnity plan, we likely would have been responsible for paying the entire $850 upfront and submitting a claim to try to get reimbursed for part of it later.
The network discount we received by having a managed care plan saved us $600 right off the bat.
Preventive Care Often Covered 100%
Another big perk of many managed care plans is that they fully cover certain preventive services like annual checkups, immunizations, and cancer screenings.
This encourages plan members to get recommended preventive care that can catch issues early before they become major (and costly) problems down the road.
According to the Health Care Cost Institute, the percentage of preventive care visits that were fully covered without a copay rose from 39% to 65% between 2012 and 2020.
This shift has been driven by provisions in the Affordable Care Act as well as insurers wanting to incentivize prevention.
The Bottom Line
When shopping for individual medical coverage, looking at managed care plans can be worthwhile because of the significant cost savings they provide compared to indemnity plans.
The discounts negotiated with in-network providers reduce costs across the board for doctor visits, hospital stays, lab work, and more.
Plus, many plans now offer additional savings by fully covering preventive services without copays.
For these reasons, managed care is worth strong consideration if you want quality coverage at an affordable price.
