Health Insurance 101
As costly as health insurance can be, today the cost of going without health insurance can be even greater. Medical expenses were the number one reported reason for bankruptcies last year.
Adequate health insurance not only protects the health of you and your family, but can save you from financial ruin in the case of serious illness or injury.
Types of health care insurance plans available
There are many different types of health care insurance plans available. Knowing your options is the surest way to find an affordable health insurance product that meets your particular needs.
Group Health Insurance – Group health insurance tends to be more affordable than individual health insurance because of the buying power and shared risk of the group. Your employer usually provides group health insurance, but there are other ways to obtain a group health insurance plan. If you are self-employed you may be able to purchase a Group plan, or you may find one offered through a trade group or association.
If you are waiting to become eligible for an employer based group health insurance plan, you may want to consider short-term health insurance.
Individual health insurance – Also known as private health insurance, there are many more health care insurance plans available today for private or individual health insurance. Full coverage offering as many medical benefits as employer based group plans can be prohibitively expensive for many people, however there are many options for affordable private health insurance. Such lower cost health plans may come with high deductibles, but they can at least cover you for catastrophic medical events.
Student Health Insurance – As the name implies student health insurance is a healthcare plan designed for full time college students. Today many colleges and universities require health insurance as a condition of attendance.
Short-term health insurance – Also known as “gap Insurance” is health insurance designed for people in transition, for example, if you are currently waiting for group coverage to start, or find yourself in between jobs, or retired but not yet 65. Short term health insurance can be purchased for as little as 1 month or as long as 36months in some cases.
Dental Health Insurance – Dental insurance is one of the most common private insurances purchased. Dental plans offer a variety of benefits making access to dental care more affordable.
Types of healthcare insurance available
There are basically two main types of health insurance available: indemnity plans and managed care plans.
Indemnity plans, are also known as fee-for-service healthcare plans. Fee-for-service healthcare plans are the most expensive type of private health insurance, but they also offer the most flexibility in terms of choice of doctors, hospitals, and other healthcare providers.
Indemnity plans usually work with a deductible, which means you pay a certain amount of your medical expenses out of pocket, but once the deductible is reached – all or most of your bill is paid by the insurance company.
Managed care plans
Managed care plans are made up of groups or networks of healthcare providers who have agreed to participate in the plan. Managed care plans are typically much more affordable health insurance than indemnity plans. There are three types of managed care health insurance plans.
- HMO´s (5health maintenance organizations) – HMO’s require you to pay a flat monthly fee. There are usually no deductibles with an HMO. HMO health plans are significantly cheaper health insurance plans than Fee-for-Service Plans. You must see participating practitioners in an HMO, or pay yourself for services of health providers outside of the healthcare insurance plan. While you are restricted to doctors within the HMO, there usually are many qualified doctors to choose from.
- PPO´s (5preferred provider organizations) – A Preferred Provider Organization is sort of the “next generation” HMO. Unlike an HMO, which is usually made up of a group of doctors practicing under one roof, a PPO is a network of participating practitioners to which you can go for services. You also have the additional flexibility of seeing a doctor outside of the network, but you will have to pay more for those visits. PPO’s like HMO’s usually eliminate deductibles and co-pays and therefore represent an affordable health insurance option for many.
- POS (5point of service) – POS health care insurance plans are a kind of a “hybrid” between PPOs and HMOs. Like an HMO you need to select a primary care physician who directs your care and refers you to specialists as needed. However, unlike an HMO and more like a PPO, you can elect to see practitioners outside of the network, and pay the difference.