Get to Know Your Health Insurance Options
The average life expectancy is approximately 75 years. It gradually increases as new medical treatments and advancements allow individuals to live longer, healthier lives. Health insurance helps people afford the medical visits and procedures required for maintaining a vigorous way of life. There are many different plans and policies that may be utilized. Some health insurance plans are provided by the government. Several are offered through employers. These plans may also be obtained by directly paying the insurance company.
Health insurance operates on the principle that the whole is greater than the sum of its parts. A large group of individuals agree to pool periodic payments into one “account” held by the health insurance company. In turn, the insurance provider will cover most of each patient’s medical costs. This plan greatly reduces the financial burden of large medical bills. The health insurance policy holders pay only a periodic premium and/or deductible to avoid paying large lump sums.
Government health insurance plans have been implemented for the poor and the elderly. The Department of Health and Human Services is in charge of federally funded health insurance in the United States. People ages 65 and older are eligible for Medicare coverage. Medicare insurance plans are funded by federal payroll taxes and small monthly premiums from those covered by the plan. Because Medicare coverage is somewhat limited, many participants choose to purchase supplemental plans from private companies. Medicaid provides coverage to low-income families, but it is especially meant for children and pregnant women. Those who earn below the federal poverty level are eligible. These individuals receive exceptionally affordable coverage.
Private health insurance plans may be obtained through an employer. Those seeking coverage may also contact a health insurance company to obtain coverage. Those who go through the health insurance company are usually self-employed, work part-time, or have low-wage occupations that do not offer health insurance plans. Private coverage usually offers more comprehensive coverage than government health insurance. Everything from routine visits to the doctor to extensive surgery and long hospital stays are provided.
The two most common forms of private health insurance are indemnity plans and managed care plans. Indemnity plans give its members the choice of any health care provider they want. This includes doctors, hospitals, surgeons and etcetera. The policy holder and insurance company agree to split the medical costs. In most cases the individual pays only 20 percent of the costs while the insurance company pays the rest.
Managed care plans provide its members with a list of designated physicians, hospitals, and health care providers. The person chooses a primary care physician from the list and also agrees to pay a small portion of medical expenses. Managed care plans also offer incentive programs to those who take preventative measures to preserve their health. For example, individuals who participate in programs to help them quit smoking are reimbursed for the cost of the program.
Managed care health insurance plans can be broken down into further segments: Health Maintenance Organizations (HMOs), Preferred Provider Organizations (PPOs), and Point-of-Service (POS) Plans.
Health Maintenance Organizations provide health insurance that covers any medical service as long as the policy holder pays a monthly premium. The patient may only visit one of the selected health care providers. But, the medical bills are almost entirely paid by the insurance company. There is no coverage for doctors or hospitals outside the network of providers unless there is an approved emergency referral.
There is a list of participating health care providers for a Preferred Provider Organization. These are physicians the company would prefer its policy holders visit. They must choose a primary care physician. If individuals do so, the health insurance company will cover approximately 80 percent of the costs. However, the health insurance coverage does not limit members to those physicians only. If the person receives care from out-of-network providers, the company pays less. Typically, the company covers 50 percent of out-of-network expenses.