Due to escalating medical costs it is necessary for people to be covered by a health insurance plan. Health insurance helps people pay medical expenses, makes it easier for them to see a doctor and protects people from having to pay high medical bills. A good health insurance policy should contain several types of coverage: Hospital expense insurance pays your inpatient charges including room and incidental service costs if you are hospitalized. Surgical expense insurance covers surgeons' fees and related costs of surgery. Physician expense insurance pays for visits to a doctor or for a doctor's hospital visit. Major medical insurance offers broad coverage with a very high maximum benefit that's designed to protect you against losses from major illness.
There are essentially two kinds of health insurance, Fee for Service and Managed Care. Fee for Service: In this plan the medical professional is paid a fee for each service rendered to the patient. Patients can consult a doctor of their choice and either the doctor or the patient files the claim. There are essentially two kinds of health insurance, Fee for Service and Managed Care. Fee for Service: In this plan the medical professional is paid a fee for each service rendered to the patient. Patients can consult a doctor of their choice and either the doctor or the patient files the claim.
Managed Care: More than half Americans have some kind of managed care plan. They provide health care services at a lower cost. Various plans function differently and include HMO's, PPO's and POS plans. Health insurance plans, are therefore indemnity or managed care plans. The major difference between them is the choice of health care providers, out of pocket costs and the manner of bill payment.
Indemnity Plans: offer a broader selection of healthcare providers than managed care plans. A traditional indemnity plan allows a great deal of choice in the doctors or hospitals you choose for your treatment, but involves higher out of pocket costs and more paperwork. You may choose any doctor or specialist you like with no referrals required. In this plan you pay an annual deductible before the insurance company begins to pay on your claim. Once the deductible has been paid the insurance company will pay your claim at a set percentage of the usual customary and reasonable (UCR) rate for the service. The UCR rate is the amount that healthcare providers in your area charge for any given service. Indemnity plans pay their share of costs for covered services only after they receive a bill, meaning you pay upfront and then claim reimbursement from your health insurance company.
Managed Care Plans: usually makes use of healthcare provider networks. Doctors within a network perform services for managed care patients at pre-negotiated rates and normally submit the claim to the insurance company. In general you have lower out of pocket costs and less paperwork, but with a managed care plan your choice of health care providers is limited to doctors within the network. There are several managed care plans like HMO, PPO, POS. plans
Health Maintenance Organization (HMO) : There are many variations of HMO plans. In this plan members pay lower out of pocket costs but are restricted in their choice of health care providers. As a member of HMO you are required to choose a primary care physician (PCP), who will take care of most of your health care needs. If you need to see a specialist you must obtain a referral from your PCP. With an HMO plan you have more coverage for a wide range of preventive health care services. You may not have to pay a deductible before coverage starts and co-payments are also minimal. You need to keep in mind that you have no coverage for services rendered by non-network providers.
Preferred Provider Organization(PPO): In this plan you use the services of doctors and hospitals within the insurance company's network. These health care providers are under contract to the insurance company and offer their services at a discounted rate. You are required to pay an annual deductible before the insurance company begins the coverage. You may also have a co-payment for certain services or be required to cover certain percentage of the total charges for your medical bill.
Point of Service(POS): This plan combines features of HMO and PPO plans. You are required to choose a primary care physician from the plan's network of providers. Services rendered by a PCP are not subject to a deductible and this plan offers coverage for preventive care visits. You receive a higher level of coverage for services provided by network physicians. Services of out of network providers are subject to a deductible and are covered at a lower level.
Health Saving Accounts (HSA): Legislation establishing Health Saving Accounts took effect on January 1, 2004. HSA and HSA eligible health insurance plans are gaining in popularity. An HSA is a tax favored saving account that may be used in conjunction with an HSA eligible high deductible health insurance plan to pay for qualifying medical expenses. You can save money by a HSA eligible health insurance plan as the monthly premium on a HSA eligible high deductible plan is less expensive than monthly premium for a lower deductible health insurance plan.
Nearly all Americans rely on third party insurers or a government organization to help them finance the cost of their medical bills.
Private Health Insurance
Government Funded Health Coverage
Job based coverage: is the most favored kind of insurance where you can get your health insurance through an employer. This is the most consumer friendly insurance policy. All employees are accepted for coverage regardless of their health status. It offers guaranteed renewability meaning your health insurance cannot be cancelled if you become sick. The insurer can exclude coverage for a pre-existing health condition but only for 12-18 months depending on circumstances. If you had insurance before joining a job based coverage than the insurer must reduce the pre-existing condition exclusion period by the amount of time you were covered in the previous plan. When you leave the job you are offered COBRA continuation coverage which lasts till 18-36 months. In a job based coverage you are limited by the plan option given by the employer. It also limits the doctors you can consult and provides less prescription drug coverage. Federal statues governing employee benefits protect the consumer even after coverage is terminated. These consumer protection laws make job based coverage a better health insurance option.
Individual Policies: If for some reason you do not get health insurance through your job you can opt for an individual policy, though an individual policy is hard to get, more expensive and not consumer friendly. The best option is to avail the services of an insurance agent registered with the State Department of Insurance.
Association Health Plans: An association health plan is insurance coverage offered to members of an association. The association must exist for some other purpose than to sell insurance. When people do not qualify for job based insurance they seek out association health plans. Since association plans are not group insurance plans they do not respect the consumers rights and protection that apply in the market. They do not offer the same premium rate to each member and it is also legal for them to raise the premium rate from year to year. Association plans are not subject to state regulations mandating coverage for specified diseases or conditions. But they do offer cheaper coverage.
Medicare: is a federal government entitlement program that provides health coverage to people above 65 years of age as well as for people with certain disabilities that prevent them from working. Medicare is a plan of various parts and one can elect for certain parts.
Part A is the basic Medicare benefit plan, all Medicare eligible individuals are enrolled in Part A,free of cost. This plan covers all inpatient hospital stays.
Part B provides optional coverage that pays for doctor's visits and outpatient hospital care, physician therapy and home health care. Beneficiaries must elect to enroll in Part B and are charged a premium. Part B offers 80/20 coverage meaning Medicare pays 80% of the total bill and you pay 20%. You also have to pay an annual deductible before the coverage begins.
Part C is Medicare Advantage offering managed care, PPO and fee for service coverage. It is available in certain regions only and premiums are higher.It combines the features of plan A and B and also additional coverage.
Part D is Medicare's new Prescription Drug Plan. You can also elect for Medigap Supplemental coverage to cover areas not covered in Plan A and B.
Medicaid is also a government initiative to provide health care for low-income groups. Federal and state governments fund Medicaid. Eligibility for Medicaid varies from state to state and the best method to know if you qualify is contact your State Medicaid Officer. Coverage includes hospitalization costs, physician care, long term care, though prescription drug coverage is optional. Families USA has a helpful consumer assistance program which allows you to search for an insurance policy in your state, best suited to you and also offers advice concerning all types of health coverage.
State High Risk Pools are operated by 31 States and are designed as a safety net for people whose health condition makes it difficult for them to obtain a health insurance policy. Most high-risk policies offer comprehensive coverage for major diseases and long term care. Typically high-risk coverage is more expensive than a regular policy.Though escalating medical costs cause a corresponding increase in insurance policy rates, it is wise to have a suitable policy covering your health.
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