Health Insurance Basics

Health insurance is a necessity for all individuals. This ispay in co-insurance, the lower your premiums.
because even a minor illness can quickly become aManaged care plans use "networks." This means that
life threatening condition that you can cost thousandsyou have to choose from a specific list of doctors,
of dollars to treat. Many illnesses have been financiallyclinics, hospitals and health care providers. These
devastating to many people and families and havingproviders are contracted with your plan to provide
adequate health care can assist you in covering thoseservices to members of the plan. Some managed
medical expenses as well as helps to ensure that youcare plans will require that use only providers in the
can afford preventative medicine as well.plan for your routine care. Others will pay for care
It is important to understand how health insurancefrom any provider, but offer you more financial
coverage works before you purchase a plan. Theincentives for sticking with those in the network.
health insurance plan that you choose must meetManaged care plans are usually a more affordable
your needs as an individual or family. There areoption. Managed care networks provide healthcare
several different types of health coverage availableprofessionals with "built-in" clientele, thus allowing
and having an understanding of health plans can helpthem to lower their rates. These plans also
you choose the right one.emphasize preventative care to keep medical
Health care plans will typically pay for most, andconditions at bay. In general, the trade-off for these
possibly all, of the cost of treatment for illnesses andprograms is that you may not be able to use your
injuries. These are usually classified as "managed care"doctor of choice, but you will receive increased
or "fee for service."affordability.
Most people are familiar with "fee for service" plansThere are three types of managed care plans
and they are often referred to as "indemnity plans."including:
These are plans that are sold by traditional insuranceÂ- Preferred Provider Organization Plans - These
companies and you can go to any doctor you wantallow you to go to any provider you wish, but you
and you don't require a referral if you need awill save if you use providers that are in the network.
specialist. A fee-for-service plan will often pay forYou do not have to select a primary care physician
most of the costs of treatment for medicalfor a PPO plan.
conditions that are covered in the policy. In mostÂ- Health Maintenance Organizations - These
cases, your healthcare provider will bill the insurancerequire you to only receive care from providers
company directly for the cost of your care, but inwithin the network. There are exceptions should a
some instances you may have to pay the bill andmedical emergency occur. With a HMO, you will have
then file a claim for reimbursement with the insuranceto choose from a "primary care physician" list. Your
company. With a fee-for-service plan, you will bephysician will oversee your medical care and provide
required to pay a premium, deductible andyou with referrals to specialists and other providers
coinsurance.you may need.
Co-insurance is the portion you have to pay onceÂ- HMOs with a POS (Point-of-Service) - If this will
you have met your deductible and the plan begins toallow you to use a healthcare provider outside of the
pay benefits. Generally, your plan will pay 80% afternetwork, without first having to receive a referral.
the deductible has been met, but you are thenHowever, you will pay more for using those
required to pay the leftover 20%. The amount thatproviders. A POS plan may also exclude the option
the insurance company pays depends widely on thefor out-of-network care in certain medical situations.
state you live in. As with a deductible, the higher you