Understanding Health Insurance – A Comprehensive Guide for the Novice
Health insurance is inherently complicated. While it is true that many know and understand what many of the terms mean in individual health insurances and have a basic understanding of the details of their medical health insurance plan, there is still a lot of confusion about this type of insurance. While it is true that not all health care plans are exactly same, they have enough similar characteristics it is possible to provide a general overview of how this type of insurance works. In this guide, you will be introduced to the major concepts as presented by health insurance companies.
Using Your Health Insurance
When you become sick or injured, you will typically elect to visit a doctor. During this visit, you will be responsible for paying a co-pay. This is the amount that you are required to pay directly before the actual insurance company will pay what it has outlined as its “share”. A co-pay is different than the amount that is taken out of your pay from your employer. The amount that you, the policy-holder, pay each pay period from your sponsor (employer) is called the “premium”. This is the payment that is required to purchase a medical health insurance plan. You should know and understand that the amount that you pay towards the co-pay for a doctor visit is not applied to the deductible associated with the policy (the amount you pay before the insurance will provide coverage as a whole on the policy), but any co-pays that you place towards medical services are, in fact, applied to your deductible. Once you pay what you are obligated to pay, based on the guidelines associated with the health insurance policy, the rest is billed to the insurance company by the doctor. The doctor will then negotiate the best rate with the insurance company so that they may receive payment. It is important to understand that most doctors are not reimbursed for the full or total cost of the services that they are provided, but they are covered to meet their satisfaction.
Common Health Insurance Plans
When working to understand individual health insurances, it is important that you know what the most common plans are, and a little bit of information pertaining to those plans. The following outlines this information:
- Health Maintenance Organization (HMO) – In this type of insurance plan, a member must choose the doctor that they want to be their primary care provider from the networks that are provided by the insurance company. Should the individual seek out care that is outside of the pre-designated network, they will be responsible for the costs incurred, with the exception of a referral provided by the primary care provider.
- Preferred Provider Organization (PPO) – These insurance plans are considered to be highly flexible. The individuals that choose these plans are not restricted to a particular network, as outlined by the insurance company. Additionally, choosing a primary doctor is not necessary. While a member is not restricted to a network, medical costs are lower for those that elect to receive coverage within their network.
- Point of Sale (POS) – These health insurance plans combine the elements of the HMO and PPO to create a type of hybrid medical health insurance plan. A primary provider must be selected, but, members have the option of receiving care from another network. If a referral is not provided for care outside of the network, the costs associated with the expenses that the member are responsible for will be much higher.
- Exclusive Provider Organization (EPO) – These individual health insurances require the selection of a primary care provider and require the members to receive care within a network, so, they are very similar to a HMO. The benefit to this type of health insurance is that no deductible is required; however, co-pays are required.
According to statistics, approximately 48,200,000 individuals that are considered Americans are uninsured. Of that figure, 7.8% are children who have yet to reach their 18th birthday, and 22.3% are adults who are up to 64 years of age. That means 18.2% of all people under the age of 65 do not have individual health insurances. Many are uninsured because of the fact that they simply do not understand the types of coverages that are available, as well as the terms associated with those coverages. Now that you have been introduced to these facts, you will find that it is much easier to find health insurance for your needs and the needs of your family.