Health insurance as one knows is a type of insurance which is required at time of severe illness.
This health insurance comes in various types & plans which can be chosen according to one’s requirement. Basically the plans are either indemnity plans or health maintenance organizations (HMO’s). The government in United States by end of 2003 launched a new option called Health Savings Account (HSA). This option combines high deductible plans with a tax-advantage savings account.
Each of plans has been explained in detail below:
(1)Indemnity Plans: If you enroll in this plan you can go to doctor of your choice and then you or your doctor can submit claim to insurance company. In this plan one can get only covered medical expenses back. But most of procedures are covered under this plan. In this plan you pay a sizeable percentage of what they consider the usual charge for covered services. The insurer pays 80% of the usual costs and individual pay around 20% called as co-insurance. In addition to that indemnity plans have deductibles which need to be paid before the insurer starts reimbursing the medical bills. The range for deductibles varies from $100-$300, $500-$1000 or more. As the deductibles increase in amount the premiums would be lowered down. These policy have an out of pocket maximum which means that once covered expenses reach an amount the insurer will pay that covered amount only. If the doctors fee exceeds the covered expenses then that would be given by the individual.
(2)HMO: With a Health Maintenance Organization (HMO) instead of paying each individual service that you receive you pay a premium in return. With this plan, one needs to choose a primary care physician to coordinate for ones care. Generally one must seek a referral for physician before visiting a specialist. HMO will decide the fee schedule with the local physician you have given reference to. Negotiating discounts from health providers is the way HMO keeps health care costs in check. HMO is also one of the affordable types of health insurance. Some HMO’s will apply copayments for certain services with a minimal charge of $10. HMO delivers care directly to patients. Patients can go to HMO’s facility to see nurses and doctors.
(3) PPOs: PPO commonly called as preferred provider organization is a form of managed care which one to see doctor at any time. PPO plans offer one to negotiate with doctors for discounts which would the lead to doctors becoming part of PPO. If one individual sees the doctor in PPO network a co-payment fee for service such as $25 will be paid. If you see a doctor out of network you get coverage but would cover only a portion of the bill, usually 70-80%, and remaining has to be paid by oneself. Also there are some deductibles PPOs have. These amounts need to be paid before your insurer starts reimbursing the medical bills. Higher the deductibles lower the premium amount. The deductibles range from $100-$300, $500-$1000. PPO’s main advantage is self-referrals. This means you can see any doctor within or outside PPO network without referral at any time.
(4) HSA: HSA called as Health Savings Account is a type of medical account which allows one to save money to pay for current & future medical expenses on a tax-free basis. To enroll into HSA account you need to have high deductible plans along worth no health insurance. It is a good option for those who want to protect themselves from health care costs, but don’t involve day-today medical expenses. It can serve as a good option for small businesses. High deductible plans generally have lower premiums than HMO’s, PPO’s but come with higher out of pocket costs. So to avoid that risk one can contribute a minimal amount of money which will depend and change each year. Making such contributions would result in reduction of taxation amount and money in savings account can be used for future medical expense bills. The major feature of this plan is that it pays expenses for your minimalistic health needs like hearing aids or eye glasses which no other plan offers.
(5) POS Plans: POS called as Point-of-service plans combine the services of PPO & HMO plans. In this plan you can use a primary care physician or can self direct care at any service point. In case of POS plans one need to obtain services from network outside PPO & HMO networks. These services charges will be reimbursed according to rule. As in every plan there is amount of deductibles one needs to pay before the insurer start reimbursing your medical bills. These deductibles are in range of $100-$300 per year for individual, $500 or more for a family. As one knows higher the deductibles lower the premiums.
This health insurance comes in various types & plans which can be chosen according to one’s requirement. Basically the plans are either indemnity plans or health maintenance organizations (HMO’s). The government in United States by end of 2003 launched a new option called Health Savings Account (HSA). This option combines high deductible plans with a tax-advantage savings account.
Each of plans has been explained in detail below:
(1)Indemnity Plans: If you enroll in this plan you can go to doctor of your choice and then you or your doctor can submit claim to insurance company. In this plan one can get only covered medical expenses back. But most of procedures are covered under this plan. In this plan you pay a sizeable percentage of what they consider the usual charge for covered services. The insurer pays 80% of the usual costs and individual pay around 20% called as co-insurance. In addition to that indemnity plans have deductibles which need to be paid before the insurer starts reimbursing the medical bills. The range for deductibles varies from $100-$300, $500-$1000 or more. As the deductibles increase in amount the premiums would be lowered down. These policy have an out of pocket maximum which means that once covered expenses reach an amount the insurer will pay that covered amount only. If the doctors fee exceeds the covered expenses then that would be given by the individual.
(2)HMO: With a Health Maintenance Organization (HMO) instead of paying each individual service that you receive you pay a premium in return. With this plan, one needs to choose a primary care physician to coordinate for ones care. Generally one must seek a referral for physician before visiting a specialist. HMO will decide the fee schedule with the local physician you have given reference to. Negotiating discounts from health providers is the way HMO keeps health care costs in check. HMO is also one of the affordable types of health insurance. Some HMO’s will apply copayments for certain services with a minimal charge of $10. HMO delivers care directly to patients. Patients can go to HMO’s facility to see nurses and doctors.
(3) PPOs: PPO commonly called as preferred provider organization is a form of managed care which one to see doctor at any time. PPO plans offer one to negotiate with doctors for discounts which would the lead to doctors becoming part of PPO. If one individual sees the doctor in PPO network a co-payment fee for service such as $25 will be paid. If you see a doctor out of network you get coverage but would cover only a portion of the bill, usually 70-80%, and remaining has to be paid by oneself. Also there are some deductibles PPOs have. These amounts need to be paid before your insurer starts reimbursing the medical bills. Higher the deductibles lower the premium amount. The deductibles range from $100-$300, $500-$1000. PPO’s main advantage is self-referrals. This means you can see any doctor within or outside PPO network without referral at any time.
(4) HSA: HSA called as Health Savings Account is a type of medical account which allows one to save money to pay for current & future medical expenses on a tax-free basis. To enroll into HSA account you need to have high deductible plans along worth no health insurance. It is a good option for those who want to protect themselves from health care costs, but don’t involve day-today medical expenses. It can serve as a good option for small businesses. High deductible plans generally have lower premiums than HMO’s, PPO’s but come with higher out of pocket costs. So to avoid that risk one can contribute a minimal amount of money which will depend and change each year. Making such contributions would result in reduction of taxation amount and money in savings account can be used for future medical expense bills. The major feature of this plan is that it pays expenses for your minimalistic health needs like hearing aids or eye glasses which no other plan offers.
(5) POS Plans: POS called as Point-of-service plans combine the services of PPO & HMO plans. In this plan you can use a primary care physician or can self direct care at any service point. In case of POS plans one need to obtain services from network outside PPO & HMO networks. These services charges will be reimbursed according to rule. As in every plan there is amount of deductibles one needs to pay before the insurer start reimbursing your medical bills. These deductibles are in range of $100-$300 per year for individual, $500 or more for a family. As one knows higher the deductibles lower the premiums.
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