Medical Insurance is a necessity for all individuals. That is because even a minor illness can quickly become a life threatening condition that you can cost thousands of dollars to treat. Many illnesses have been financially devastating to numerous people and families and having adequate heathcare can assist you in covering those medical expenses as well as helps to ensure that you can afford routine medicine as well.
It is important to understand how health care insurance coverage works before you buy a plan. The health care insurance policy that you select must meet your needs as an individual or family. There are several different kinds of health coverage available and having an understanding of health plans can help you select the right one.
Health careprograms will typically pay for most, and possibly all, of the cost of treatment for illnesses and injuries. These are generally classified as “managed care” or “fee for service.”
The majority people are familiar with “fee for service” programs and they are often referred to as “indemnity plans.” These are programs that are sold by traditional insurance carriers and you can go to any medical provider you want and you do not require a referral if you need a specialist. A fee-for-service plan will often pay for most of the expenses of treatment for medical conditions that are covered in the policy. In most cases, your medical provider will bill the insurance company directly for the cost of your care, but in some instances you may have to pay the bill and then file a claim for reimbursement with the insurance company. With a fee-for-service plan, you will be required to pay a premium, deductible and coinsurance.
Coinsurance is the portion you have to pay once you’ve met your deductible and the plan begins to pay benefits. Usually, your plan will pay 80% after the deductible has been met, but you are then required to pay the leftover 20%. The amount that the insurance company pays depends widely on the state you live in. As with a deductible, the higher you pay in co-insurance, the reduce your premiums.
Managed care programs use “networks.” This means that you have to select from a specific list of medical providers, clinics, hospitals and heathcare providers. These providers are contracted with your plan to provide services to members of the plan. Some managed care programs will require that use only providers in the plan for your routine care. Others will pay for care from any provider, but offer you more financial incentives for sticking with those in the network.
Managed care programs are generally a more affordable option. Managed care networks provide medical professionals with “built-in” clientele, thus allowing them to reduce their prices. These programs also emphasize routine care to keep medical conditions at bay. In general, the trade-off for these programs is that you may not be able to use your medical provider of choice, but you will receive increased affordability.
There are three kinds of managed care programs including:
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<li>• Preferred Provider Organizations Plans – These allow you to go to any provider you wish, but you will save if you use providers that are in the network. You do not have to select a primary care medical provider for a PPO plan.</li>
<li>• Health Maintenance Organization (HMO)s – These require you to only receive care from providers within the network. There are exceptions should a medical emergency occur. With a Health Maintenance Organization (HMO), you will have to select from a “primary care physician” list. Your medical provider will oversee your medical care and provide you with referrals to specialists and other providers you may need.</li>
<li>• HMOs with a POS (Point-of-Service) – If this will allow you to use a medical provider outside of the network, without first having to receive a referral. Thus, you will pay more for using those providers. A POS plan may also exclude the option for out-of-network care in certain medical situations.</li>
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