Health Insurance

October 3, 2008

Health Insurance

Health insurance is one of the most important investments an individual can make for his/her health and for family member’s health , its also a insurance against loss due to ill health , this term “Health Insurance” is generally used to describe a form of insurance that pays for medical expenses. Health insurance covers medical expenses for accidents or sickness, on a first-party basis, and regardless of fault. It covers the charge .For hospital, physician, and other medical expenses resulting from illness or injury. We can say that it’s a financial protection against all or part of the medical care costs arising from accidental bodily injury or disease .it can be obtained on either an individual or a group basis. It also covers normal and preventive care such as check-ups, prenatal and baby care.

Types of Health Insurance

•    Traditional indemnity plans (fee-for-service plans)
•    HMOs(Health Maintenance Organizations)
•    PPO (Preferred Provider Organizations)
•    POS ( Point-Of-Service plans)

Traditional indemnity plans

Traditional health insurance is known as indemnity or fee-for-service health insurance, traditional health plans typically offer the most choice of doctors and hospitals, in this you pay a certain amount of your medical expenses up front in the form of a deductible and afterward the insurance company pays the majority of the bill. With traditional health insurance, you can visit any doctor or healthcare provider, change providers at any time, and enjoy national coverage. You will pay a premium for this type of freedom, as traditional plans are more costly than managed care plans for both individuals and employers than managed care plans.

An HMO, Health Maintenance Organization, is a type of insurance plan that focuses on the long term care of its insured and is normally less expensive than a Major Medical Plan. Each patient has a Primary Care Physician, who is responsible for providing preventive care and coordinating care for the patient if additional specialists or hospitalization is necessary. This keeps costs down .In addition, limiting choices, such as choosing physicians only within a network and not covering services that are deemed unnecessary, controls costs.

A PPO (Preferred Provider Organization) is similar to an HMO as there is a network of physicians, but unlike an HMO in that an insured is not limited to network physicians and can see any doctor they choose. However co-payment and deductibles will be less for services. In addition, network physicians determine reasonable charges therefore, if an out-of-network physician charges more for services, the insurance company will still pay only 80% of the in-network charges.

Point-of-service plans are similar to PPOs, but they as Primary Care Physician (PCP). You’ll need to choose your PCP from among the plan’s network of doctors. As with the PPO, you can choose to go out of network and still get some kind of coverage. To get a referral to a specialist, though, you usually must go through your PCP. You can still choose to refer yourself, but it’ll mean more hassles and more money coming out of your pocket. If your PCP refers you to a doctor who is not in the network, the plan should pick up most of the cost. But if you refer yourself out, then you will probably have to deal with more paperwork and a less reimbursement.