The term health insurance or major medical generally refers to a type of policy that will pay specified sums for hospital room and medical expenses or treatments incurred by the insured. Health policies can offer many options and vary in their approaches to coverage.
Health insurance can be underwritten for an individual or a group. Underwriting for an individual policy is much more intense than for a group where the risks involved are spread among a large number of people. Typically an individual making application for health insurance receives a policy when approved and a person enrolling in a group gets a certificate number.
Temporary individual health insurance can also be applied for. Examples would be students at college that require coverage till graduation. Coverage is usually purchased for specific time periods such as a 30 day; 60 day, 90 day, 180 day or 1 year. These contracts are not permanent and if renewed they usually can only be renewed once. [ecard]
Group insurance offers a wide variety of options such as:
Fee-for-service coverage provides eligible employees with the services of a doctor or hospital with partial or total reimbursement depending on the insurance company. Most insurance companies offer 80/20 plans; the insurance company pays 80 percent of the bill, and the employee pays 20 percent up to a certain amount or ‘stop-loss’. The employee can go to any doctor he or she chooses, and the plan covers any service that is defined as medically necessary and specified in the plan.
Health maintenance organizations commonly called HMOs provide a range of benefits to employees at a fixed price with a minimal contribution or sometimes no contribution from the employee, as long as employees use doctors or hospitals specified in the plan. Usually, HMOs are set up so patients go to the managed-care-plan facilities. If a patient goes to a doctor or hospital outside the plan–except in case of an emergency or if the individual was traveling outside the plan’s service area–no benefits are paid at all. It’s a good idea to make sure you select an HMO that has facilities near where you live.
Preferred provider organizations or PPOs are considered managed fee-for-service plans because s restrictions are put in place to control the frequency and cost of health care. Under a PPO type plan, arrangements are made among the health care providers specifically hospitals and doctors to offer service at an alternative price which is usually a lower price. Usually there’s a co-pay amount, which means that all group participants pay $5 or $10 for each visit to doctors specified in the plan and the insurance company pays the rest. PPOs differ from an HMO in that if an insured goes to a doctor not specified by the insurance company, the PPO plan still offers partial coverage.
Dental, Vision, Accident (Separate Policy Available)* and Supplemental Life benefits are additional options that may be offered in group plans that are typically not available in individual health plans unless purchased separately.
*Accident Insurance – Accident insurance or accidental death and dismemberment (AD&D) is a type of policy that pays benefits to the beneficiary if death or injury sustained by the insured resulted from an accident. This is a limited coverage form of health insurance and is far less expensive than traditional health insurance.
Medicare – a federal health insurance program for people who are 65 or older or certain younger people with disabilities and people with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a transplant, sometimes called ESRD).
- Medicare Part A – program that covers inpatient hospital stays.
- Medicare Part B – Covers services and supplies that are medically necessary to treat your health condition.
- Medicare Part D – is a United States federal-government program designed to subsidize the costs of prescription drugs.
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