The Basics of Health Insurance

Many people don't understand very much about health insurance, and therefore do not really see the purpose in it. If you are one of the several that do not understand the basics of health insurance, this article is for you.

Kinds of Health Insurance

Fee-for-service

Patients can choose who cares for them and pays for the fee of each service that is provided.

Managed Care

Chosen by the majority of US citizens, this plan provides all-inclusive healthcare as well as financial motivation to use providers in the network, or plan. HMOs and PPOs are the most common kinds of managed care plans.

HMO

Members of a health medical organization (HMO) must select a physician who will be the primary caregiver, and then request a referral from him/her to obtain services from other physicians of the network. With an HMO, the cost is spread out amid a restricted amount of members with and so they are cheaper than PPOs, although the cost of receiving treatment from a doctor can be much more expensive.

PPO

The structure of a preferred provider organization (PPO) is similar to that of an HMO's, but PPO members have more flexible options when it comes to choosing a service of a physician out of the network. PPOs can have added benefits such as plans for prescription drugs.

Both of these plans have their disadvantages in addition to their advantages, and choosing one over the other should be done after a close assessment of each health care plans' aspects, including potential out-of-pocket expenses.

Individual Plans vs Group Plans

Group health insurance plans are quite popular among Americans and are usually joined through an employer or other organization. They tend to be less costly and provide more coverage than individual plans.

Those who choose not to be covered with group plans- or those who do not have access to it- instead opt for individual health insurance plans, which may help manage the costs of health insurance, but are normally pricier and more limiting than group health insurance plans.

Your Costs

Deductibles or co-payments for various services are typical with health insurance plans. These costs that you pay out-of pocket before the insurance will cover you can vary, depending on the type of service you have received. Review your limits carefully before you choose a policy, as you may end up paying more out-of-pocket fees if you do not understand your policy.