December 16, 2019
What is Health Insurance?
The terms “Health and Accident Insurance”, “Accident and Sickness Insurance” and Health Insurance” are used interchangeably in the health insurance industry, from state to state and company to company. No matter what it is called in the industry, it all means the same thing to consumers – a critically important type of insurance that provides financial protection from the high costs of illness and injury.
Health insurance refers to the board field of insurance plans that provide protection against financial consequences and helps cover the cost of an insured individual’s medical and surgical expenses from illness, accidents, injury, disability and sometimes dental expenses incurred by the insured.
To help better understand what Health Insurance is, think of your car when it breaks down. What do you do to keep in running? Or your home when after a bad storm hits and injures the roof or breaks out a window. We have to repair them, but not all insurances plans cover these issues.
So relating the need for what may happen with your body. Health insurance, in almost all cases, will help pay for the repair of an injury or illness to your body mentioned above. There are several different types of health coverage plans that we’ll need to go over with you.
How Health Insurance Works
Let’s break down a few things first. Insurers use the term “provider” to describe a clinic, hospital, doctor, laboratory, healthcare practitioner, or pharmacy that treats an individual. The “insured” is the owner of the health insurance policy or the person with the health insurance coverage. Using these terminologies will better help you understand those long coverage plans you have to read from the “provider”.
Health insurance can be tricky to navigate. Managed care insurance plans require policyholders (insured’s) to receive care from a network of designated healthcare providers for the highest level of coverage. If patients seek care outside the network, (depending on the plan) they must pay a higher percentage of the cost. In some cases, the insurance company may even refuse payment outright for services obtained out of network.
Many managed care plans have to choose a primary care physician who oversees the patient’s care, makes recommendations about treatment, and provides referrals for medical specialists. I’ll break this down below in more detail.
Insurance companies may also deny coverage for certain services that were obtained without preauthorization. In addition, insurers may refuse payment for name-brand drugs if a generic version or comparable medication is available at a lower cost. All these rules should be stated in the material provided by the insurance company and should be carefully reviewed. It’s worth checking with employers where you work or the company directly before incurring a major expense like Health Insurance.
And depending on the type of health insurance coverage, either the insured pays costs out of pocket and receives reimbursement, or the insurer makes payments directly to the provider.
Managed Care Plans
Most Americans regard medical insurance as the most important form of insurance protection to own and with good reason. As the cost of medical care increases, an uninsured illness or injury could result in financial disaster for many families. Not like Life insurance that helps to compensate for any type of financial loss if and when it does occur, but mostly from when death happens to a family member. Medical insurance, while still alive, covers that illness or injury that sometimes comes without prior notice.
A number of sources are available for individuals seeking health insurance protection. In general, health insurance providers can be divided into three main categories: commercial insurers, private health providers and state and federal government. In all cases, the objective is the same: to provide protection against the financial costs associated with illness, injury or disability.
Private Health Providers
Private health providers or service providers are both one of the same. They offer benefits to subscribers (you the insured) in return for the payment of a premium for these plans. Benefits are in the form of services provided by the hospitals and physicians in the plan.
Basic medical expense plan
Basic medical expense insurance is sometimes called “first dollar insurance” because, unlike major medical expense insurance, it provides benefits up front, without requiring the insured to first satisfy a deductible. You may have come across these types of plans better known as “Indemnity Plans”. For many years it was the leading type of medical expense insurance sold, but today it is overshadowed by the major medical insurance.
This is due largely to the fact that basic medical expense policies limit the type and duration of services covered and dollar amounts that will be paid (or reimbursed) to the insured. Major medical plans are not as limiting.
Basic medical expense policies classify their coverages according to general categories of medical care: hospital expense, surgical expense, and physicians’ (nonsurgical) expense. Additional plans cover nursing expenses and convalescent care. While it is common to find all categories contained under the umbrella of one policy, they can be written as separate coverages.
There are a number of companies still out there that offer and only this type of plan. Depending on what you’re looking for, it’s still not a bad coverage plan, if you understand it.
To further understand the different plans the Provider offers. Click on the of the plans below:
Provider coverage plans:
Health maintenance organizations (HMOs)
Exclusive provider organizations (EPOs)
Preferred provider organizations (PPOs)
Health Savings Account (HSAs)
Commercial Health Insurance
Health insurance may be written by a number of commercial insurers, including life insurance companies, casualty insurance companies or monoline companies that specialize in one or more types of medical expense and disability income insurance. Commercial health insurance is any type of health insurance policy not offered or provided by the government. Providers are for-profit and offer both group and individual plans. Often, people enroll through an employer who either covers the entire premium or a portion of it, with the remaining cost deducted from the participating employee’s payroll.
Commercial health insurance generally is structured in one of three ways A point of service plan, which is the most popular, lets policyholders choose a primary care physician (PCP) from a list the insurer provides. If a policyholder sees a doctor outside this network, they typically receive lower benefits for covered services. Another model is the health maintenance organization (HMO) plan. Similarly, it allows policyholders to choose PCP from an insurer established network of healthcare professionals. However, it generally does not pay for covered services received outside the network. Finally, the indemnity or fee for service model offers coverage for certain health care services and allows policyholders to see any health care professional they wish. Typically, coverage is limited though. Sound familiar.
State and Federal Government
For many people, health care cost protection is made available through a state or federal government program. At the federal level, Medicare is the primary source of health insurance. It is a part of the Social Security program that also provides disability income to qualified workers under OASDI. At the state level, Medicaid offers protection to financially needy individuals, and state workers’ compensation programs provide benefits for workers who suffer from occupational injuries or illnesses.
To see more on these programs, click on the topic below:
Medicare
Social Security Disability Income
Medicaid