Every person in America has a right to affordable health insurance coverage. Having enough coverage could mean the difference between remaining healthy and preventing illness, and that of suffering from chronic pain and health issues—and in some cases, even from fatality.
However, understanding health insurance is often frustrating and having the right insurance plan makes the difference between having a long healthy life – or not. To offer a better understanding of the different types of health coverage, we’ve listed the basic coverage types below:
This is the most common type of health care and most plans have some type of managed care plan to control the overall health care costs for everyone. Every managed care policy is different. Some offer only a set amount of coverage, or coverage for specific situations; some require you visit specific hospitals and doctors; others require you pay a certain amount for health care; Some even require you get approval from the health insurance company before going to the hospital as they want to make sure the hospitalization is needed.
Fee for Service Health Plans
This is the most conventional of health care policies. In this type of plan, you can see almost any doctor you wish or can change doctors whenever you wish. You can go to any hospital in any part of the country. However, the insurer only pays part of the health care bills. You pay a monthly premium to cover the other part. You may also need to pay a yearly deductible which could be about $250 per year for each member of your family for a total family deductible of $500. Even then, you may be responsible for a certain percentage of your health care bills. In most cases, it may be an 80/20 split, where the insurer pays 80 percent and the insured pays the other 20 percent.
These plans are Health Maintenance Organization, also known as the HMO. It is a prepaid health plan where you pay a monthly premium and, in exchange, the HMO offers health care for your family, including doctor visits, hospital stays, surgery, lab tests, x-rays, therapy and more.
The HMO arranges for this health care through its own group practice or through doctors that are associated with the service. In most cases, the insured person is limited to the types of doctors and hospitals that are in agreement with the HMO plan.
Preferred Provider Organization
Also known as the PPO, this is an insurance option that combines the traditional fee for service and HMO plan. The program works with a limited number of hospitals and doctors, but also gives you the option of choosing someone outside the PPO. The insurance offers you full coverage when you use the preferred providers and only partial coverage when you use a doctor or hospital outside of the coverage needs. Similar to the HMO, the PPO requires you choose a primary care doctor to monitor your health.
There are several sub products that fall within these categories. For instance, there are policies made for individuals or families; those that are for small businesses where there are between one to 50 employees; policies that are subsidized by an employer or by the government and many more. In these cases, the health insurance plan you are offered is one that complies with your particular situation.