What is health insurance?
Health insurance is a type of insurance coverage that covers the cost of an insured individual’s medical and surgical expense due to sickness or injury. Health insurance is commonly included in employer benefit packages. It is often seen as an employment perk.
Who is a provider?
In health insurance terminology a clinic, hospital, doctor, laboratory, healthcare practitioner, or pharmacy that treats an individual is known as the "provider." The "insured" is the owner of the health insurance policy or the person with the health insurance coverage.
There are two main types health insurance:
1. Private Health Insurance- the majority in the USA
2. Public or Government Health Insurance- the state subsidizes health care in exchange for a premium. Medicare, Medicaid, the Veterans’ Health Administration and the Indian Health Services are examples of public health insurance in the USA.
3. Health insurance plans can also be categorized by the way the Insurer/ Private Company administers their plans and connect with healthcare providers.
A. Health Maintenance Organizations (HMOs)
In this type of plan the insurer will have contracts with a network of health care providers that agree to supply services to members. Though there are many variations, HMO plans typically enable members to have lower out-of-pocket healthcare expenses. You may not be required to pay a deductible before coverage starts and your co-payments will likely be minimal. You also typically won't have to submit any of your own claims to the insurance company. However, keep in mind that you'll likely have no coverage for services rendered by out-of-network providers or for services rendered without a proper referral from your Primary Care Physician (PCP).
An HMO plan may be right for you if:
· You're shopping for a plan with lower premiums
· You want a plan without a deductible and don't mind having an out-of-pocket limit
· You need preventive care services such as coverage for checkups and immunizations
· You will have a broader range of preventative health care services
B. Preferred Provider Organizations (PPOs)
This is like an indemnity plan. As a member of a PPO plan, you'll be encouraged to use the insurance company's network of preferred doctors and you usually won't need to choose a primary care physician. No matter which healthcare provider you choose, in-network healthcare services will be covered at a higher benefit level than out-of-network services. It's important to check if you provider accepts your health plan so you receive the highest level of benefit coverage.
You will probably have an annual deductible to pay before the insurance company starts covering your medical bills. You may also have a co-payment of about $10 - $30 for certain services or be required to cover a certain percentage of the total charges for your medical bills.
A PPO plan might be right for you if:
· You want the freedom to choose almost any medical facility or provider for your healthcare needs
· You want a portion of out-of-network claims to be covered by your insurance company
· You don't want to get referrals before visiting a specialist
What is “indemnity”?
An indemnity plan gives you the freedom to direct your own health care and visit almost any doctor or hospital you like, no referrals are required. The insurance company then pays a set portion of your total charges. Though you may choose to get most of your basic care from a single doctor, your insurance company will not require you to choose a primary care physician. An Indemnity plan may also require that you pay up front for services and then submit a claim to the insurance company for reimbursement.
You'll likely be required to pay an annual deductible before the insurance company begins to pay on your claims. Once your deductible has been met, the insurance company will typically pay your claims at a set percentage of the "usual, customary and reasonable (UCR) rate" for the service. The UCR rate is the amount that healthcare providers in your area typically charge for any given service.
An Indemnity plan might be right for you if:
· You're looking for the greatest level of freedom possible in choosing which doctors or hospitals to visit
· You don't want to designate primary care physicians or get referrals to get specialists
· You want to freely visit any physician you choose
For more information, visit http://www.tdi.texas.gov/consumer/health-insurance.html