Health Insurance, health insurance quotes, Insurance, Auto Insurance, Home Insurance, Insurance Policies   Health Insurance, health insurance quotes, Insurance, Auto Insurance, Home Insurance, Insurance Policies 
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Health Insurance Basics

Home > Insurance > Health Insurance Basics

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Just as most people purchase insurance on their autos and homes to protect their property and themselves in the event of an accident, many insure themselves and their families against unforeseen expenses arising from accidents, injury or illness.

With health care costs rising dramatically each year, even relatively simple medical procedures can cost thousands of dollars. It is not just the cost of medical care that is rising, but the variety of care available is also increasing.

To reduce the risk of unexpected health care costs, private health insurance companies offer a wide array of health insurance quotes, programs and plans. They vary widely in terms of coverage, costs and benefits.

Although at first look many health insurance quotes, plans and policies may seem the same, after reviewing the technical language, you will find that they are quite different. Due of the often difficult-to-understand terminology, exclusions, and limitations, contained in these polices, few purchases are more confusing or require more careful study than health insurance.

Who Provides Health Insurance?
Health insurance quotes coverage is offered by commercial insurance companies, hospital and medical service plan providers, like Blue Cross and Blue Shield; and health maintenance organizations (HMOs) like HealthNet, PacifiCare and Kaiser, etc.

Health insurance can be purchased on an individual or group basis. Group health insurance, usually available through an employer, may also be offered by organizations such as federal societies, labor unions, college health departments, rural and consumer health cooperatives. The employer generally pays part or all of the costs for the group health insurance available to employees. As the protection provided by group health insurance varies from plan to plan, it is prudent to check with your employer, to find out exactly what coverage and benefits are available.

If your group health insurance does not fully cover all of your health needs or you are self-employed, then you will need to supplement your coverage with an individual plan. Individual insurance can be suited to your particular needs. As costs and coverage of such policies differ from company to company you should shop around and compare before making a decision to purchase.

Types of Health Insurance Policies and How They Operate

a. Medical Expense Plans
These pay expenses incurred for diagnosis and treatment of medical conditions. Payments could be made to you or your medical provider directly, if you "assign" your benefits to them. The policy or employer benefit booklet should have the terms and conditions of what is covered and what is not covered. Read this contract well before you need to use the plan. Ask your agent or employer to explain anything which is unclear.

b. Reimbursement Insurance Plans
Full freedom-of-choice plans allow you to choose any doctor and hospital. These policies call for a "deductible". This means that you must pay a fixed amount first, before the insurance company begins paying benefits. The deductible commonly runs from $100 to several thousand dollars. The higher the deductible you are willing to accept, the lower the cost of your insurance. Also involved is the "Co-insurance"- the part of the medical costs you are obligated to pay with your insurer.

For instance, most freedom-of-choice plans will pay 75% to 85% of all eligible medical costs above the deductible. You will have to pay the remainder. In other words, a medical cared bill totaling $10,000 of eligible expenses would have you paying $1,500 to $2,500 above the deductible. Policies that need you to pay a portion of the costs above the deductible usually feature a "stop loss" provision. This is the point where you stop sharing the costs with the insurer and the insurer pays all the bills at 100% for the balance of the current calendar year.

Preferred Provider Organizations (PPO) Plans allow the you to choose a doctor or hospital from a list of "preferred" providers to receive maximum benefits. If you use a doctor or hospital who is not a member of the preferred list, the plan will cover a lesser percentage of the costs. PPO plans have many of the same features of freedom-of-choice plans including coinsurance and stop loss provisions. Check with the insurance carrier well before you have to use the plan to find out if your physician or hospital is a contracting provider with your plan.

c. Prepaid Health Contracts
Health Maintenance Organizations (HMOs) were started with the idea of reducing health costs and providing preventive health care before members become ill. HMOs are made up of hospitals, doctors and allied medical personnel who have contracted to provide health care to members in return for a pre-paid monthly charge.

When joining an HMO, members select a doctor, the "primary care physician," from a list provided by the HMO. Typically family practitioners, internists, and pediatricians manage all medical care including referrals to specialists and whether further lab tests or x-rays are needed. This system is designed to eliminate any unnecessary care which could ultimately increase total health care costs.

HMO's provide incentives for individuals to seek medical care. Office visits are provided for small co pays - generally $10 or $15. Also, prescriptions are available for small co pays. Hospital expenses are generally covered at 100% for little or no co pays. Here, you do not have the option of using a medical provider who is NOT part of the HMO network. HMO's are usually available on both group and individual basis.

d. Government Sponsored Health Programs
Medicare is a federal program which gives medical coverage for people over the age of 65 and for those who are permanently disabled. You should contact your local Social Security office for more information and enrollment instructions.

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