Yes. Some plans provide their own insurance for its members. Others contract with various insurance plans such as Cigna, Aetna, and United, so that they collect payments from those companies. Then they distribute payments to their own administrators and to providers of your medical care and services.

Some healthcare companies provide an insurance plan to their patients and they also contract with the other large companies to provide care to patients outside their own insurance plan.

No. The administrators of the Plan can change co-pay amounts, pre-certification guidelines, and other policies from time to time, often on an annual basis. They may also change their network providers so that a physician might be on the plan one year and off the next, or vice versa, or off the plan one year and on the plan the following year. Usually the provider group stays about the same but there are some changes. Co-pay amounts often change annually.

An insurance company collects premiums and then distributes that money to pay doctors, hospitals and other providers for the healthcare costs of its clients. Most people have group health insurance policies through an employer or another group to which they belong. Individual policies are sometimes difficult to obtain but they are available from some insurers particularly for a young and healthy individual.

A health plan or healthcare company defers management of health care decisions and distribution of payments to its own organized group of administrators. They organize their own network of providers and set up their own organizational structure. For patients who participate in a health plan, the executives oversee management of health care for their clients and management of the funds that are used for payment of the healthcare services.

Insurance companies, health plans and healthcare organizations usually operate for profit.

Yes, and no. Until recently these two entities have been separate. There are now some healthcare companies who provide coverage for their clients and then in turn they pay the contracted fees to their own network of physicians and other providers. The insurance company and the health plan may operate to some extent as separate organizations, but within a close business relationship through ancillary companies and providers.

A Medicare Advantage Plan collects a certain amount of money from Medicare and uses that money to pay for the care of its clients. That amount is based on the number of patient members they have recruited. The individual amount per patient varies from state to state and from region to region. For example the Medicare Advantage Plan may pay $280 per member per month in one state and $680 per member per month in another state. These numbers are based on previous national statistics and statistics for the Medicare population in that area.

There are many Medicare Advantage Plans available. Some are well known and others are small. Some of them operate only in certain parts of the country. All of these plans have to comply with all Medicare rules but they are otherwise free to distribute funds to physicians, administrators, and other providers as they choose.

The Medicare Advantage healthcare company collects the money each month from Medicare, based on the numbers of its members. The health plan executives then decide how to distribute that money for payment of your healthcare. Usually some of the executives are also physicians. They decide, either directly or indirectly, how much your primary care physician is paid, how much your specialists are paid, and how much money a hospital receives for your care if admission is necessary. They oversee the precertification process for diagnostic studies and for many medications. The Medicare Advantage Plan administrators negotiate contracts in some cases with physicians, other providers and facilities that are not directly under their control. Usually they try to arrange care within their own network.

Any unused funds are distributed by the administrators of the plan to the managers, physicians and other providers, and employees of the Plan. Alternately, excess funds can be recorded as profit or they can be used to fund ancillary companies that might then be involved in your care. Any excess funds can also be distributed as bonuses to the directors and physicians in the plan.

In some cases the health plan requires you to have a referral to see a specialist. Many times procedures have to be precertified by your physician before they can be scheduled. The healthcare plan administrators decide whether they precertify the test or treatment recommended by your physician(s). They deny diagnostic studies or medications if they do not consider them medically necessary. They also set the amount of co-pay required when you see your primary physician or your specialist. They determine the amounts of your co-pay for medications.

As with all insurance plans, you should ask the representative of that plan what your own expenses will be. In many cases, they will say that it costs you nothing to join. However, you should then ask about co-pay amounts for your primary care physician, your cardiologist, neurologist, or other physicians that you may need to see. You should also ask about co-pays for medications, which medications are on the formularies, co-pays for hospital stays, and other items that are pertinent to your care. Some plans offer marketing perks, such as memberships to health clubs. Such activities can be advantageous, but since the Advantage plans work for profit, they will recoup those expenses and more as they provide oversight for your health care.

Most insurance companies and health plans have their own lists of physicians and other providers. They also have preferred hospitals. Although you might be allowed to go out of network and find your own doctor, the payments out of your own pocket can be substantially higher if you do so. If you have Medicare as primary coverage and a secondary policy, then you can see any physician or provider who accepts Medicare. Although some physicians are no longer accepting new Medicare patients and some physicians do not participate in Medicare at all, the majority of physicians still do accept Medicare patients. Most of them are “participating providers” in Medicare, which means they accept the Medicare fee.

Some physicians participate only in Medicare Advantage Plans and they do not accept “straight Medicare patients.” Other physicians accept Medicare patients and they do not participate in Medicare Advantage Plans.

Since your care is directed by your physician or provider, then your health care will be determined largely by the physicians in charge of your care. In most cases there is no significant difference in your care. However, some physicians and providers tend to order a large number of diagnostic studies, particularly if doing so helps to generate income for the group in which they participate. Other physicians do not like to order diagnostic studies if doing so could minimize the profit of the company with which they are associated.