By Mike Bell
The purpose of health insurance is to protect you from thealarming cost of medical care by providing you with insurancecoverage for specified health and medical care services.Generally, you will pay a monthly premium, a deductible, andco-payments for services you receive. The cost for insurance issignificantly less than if you had to pay for medical care outof your pocket. There are three basic types of health insurance,fee for service, consumer-directed, and managed care. Thesebasic types of insurance plans cover hospital, medical, andsurgical expenses, and depending on the particular plan youchoose, possibly prescription drugs, mental/behavioral care, anddental.
A fee for service plan means the health care professional youchoose will be paid a fee for each service provided to you. Youcan choose your own doctor and the insurance claim can be filedby either the doctor or the patient. A managed care plan willprovide coverage to their members and offers incentives forpatients who choose doctors participating in the plan's network.The 3 types of managed care plans are HMOs, PPOs, and POS plans.
An HMO allows you to receive medical care through a network ofparticipating physicians. You will generally select a primarycare doctor, who will then refer you to a specialist whennecessary. A PPO combines various features of an HMO and a feefor service plan. Members can choose from network doctors andpay lower upfront expenses, or choose any doctor they desire andpay more out of pocket expenses. A consumer-directed health plangives members more choices and options in making health caredecisions. Consumer-directed plans include a health account orfund designated for health care expenses. At the end of eachyear, unused funds will roll over to the next year.
A health insurance premium is the fee paid to the insurer topurchase health coverage. Premiums can be paid monthly,quarterly, or annually. Deductibles are the amount you will payfor covered services within a certain time frame, according tothe terms of your plan, before you will be entitled to insurancebenefits. Members with a high deductible may have to pay thefirst one thousand dollars of yearly medical expenses before theinsurance would begin to pay, and those with a higher or lowerdeductibles would pay more or less, depending on the particularamounts specified in their plan. A co-payment is a stated amountor percentage that must be paid by the member along with eachdoctor visit, medical procedure, or prescription. For example,if your specified co-payments are $25, you will pay the first$25 of each doctor visit and your insurance would coveradditional charges. Most insurance plans specify a differentco-payment amount for prescriptions, doctor visits, and hospitalor surgical care.
In choosing which type of health insurance plan is right foryou, you must consider the affordability of doctor visits andhospital care, the amount of the monthly premium, the amount ofthe deductibles, and the amount of the co-payments. Make surethe plan you chose offers coverage for services you willactually use such as doctors, prescriptions, laboratory costs,treatment for preexisting conditions, and out-of-network care.Check the rating of the insurance company in question, thenumber of patient complaints in the past year, doctor drop outrates if the insurance plan includes a network, and the numberof members who have dropped out of the plan in the past year.Health insurance that is subsidized by your employer isgenerally the least expensive, but if your employer does notoffer health insurance, you should consider an individual healthinsurance policy. The cost of medical care is far too expensiveto risk not having health insuranc
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