Health Insurance
1. What are the different kinds of health insurance?
In general, health insurance is divided into the two broad categories — traditional and managed care.Traditional health insurance usually involves what are called "fee-for-service plans" — you pay a certain amount of your medical expenses (your deductible) when you require medical attention. Once your deductible is met, your health insurance pays the remainder (typically the majority) of the bill. Fee-for-service plans generally offer a higher degree of flexibility than managed care plans, but have higher premiums, higher out-of-pocket expenses, and more paperwork.
Managed care health insurance is what is making most of the insurance industry headlines lately. With managed care, an arrangement between the insurance company and a pre-selected network of health care providers guides the medical treatment you are entitled to receive under the terms of your health insurance policy. Generally, managed care plans cost less than traditional plans, but impose certain limitations and are less flexible.
2. Aren't there different kinds of managed care programs?
Yes, there are three types of managed care programs — Health Maintenance Organizations (HMOs), Preferred Provider Organizations (PPOs), and Point-of-Service (POS) plans.HMOs are the least expensive, but also the least flexible of the managed care health plans. HMOs may be comprised of a series of medical clinics (e.g., Kaiser Permanente) or consist of a network of individual medical practices and hospitals (e.g., Centura Health, Health South, HealthOne, Exempla, etc.). HMOs offer little or no co-pays and minimal paperwork, but require patients to receive medical services and treatment from health care providers within their network after getting a referral from a Primary Care Physician (the doctor the patient chooses).
PPOs are similar to HMOs, but offer more choices and flexibility. Patients pay small co-pays ($10-$15) every time they see a health care provider. When patients receive medical services outside their prescribed network, they usually pay about 20% of the costs out-of-pocket and the health insurance coverage pays the remainder. Plans vary and sometimes deductibles are required.
POS medical care and costs under this plan varies according to where you receive the service.
2. What's the difference between group and individual health insurance coverage?
The essential difference between group and individual health insurance plans is whether or not the plan is connected with an employer or organization.Group plans insure the members of the group without regard to the health status of any of its members. Group plans typically cost less and offer broad coverage. People who receive health insurance as part of their employee benefits are covered by group plans. Self-employed people and other individuals who qualify for membership benefits in a particular organization or association may also be able to get health insurance under a group plan.
Individual plans, by comparison, take into account the individual's health status. Individual plans are medically underwritten, which means that an individual's medical records and history are evaluated for certain risk factors. Depending on the findings of the evaluation, coverage may be denied or certain exclusions can be attached to the individual policy. Individual health insurance typically costs more than group insurance, and in some cases (major health risk factors) may be extremely costly, if available at all.