Health Insurance Information Basics

Health insurance for individuals is a complete mystery to many people, mostly because they are unaware of their options. What seems like a necessary complication can be summarized so that people will have a basic idea of how health insurance works.

There are two categories of health insurance: government offered insurance and privately funded insurance. Government insurance comes in the form of Medicaid, Medicare, and Tricare. Each of these have limitations that determine if someone is eligible to receive assistance. For example, Medicaid is offered to people who have low income. Privately funded insurance is offered by various corporations, but most people have access to these services through their place of work. People can also apply to these companies on their own, but there are often strict limitations to determine who is eligible for service.

It is also important to know that there are also three types of insurance available. These three types are consumer-directed, fee for service, and managed care. Each of these contribute to a variety of health needs, such as medical visits, surgical needs, prescription drugs, hospital expenses, and sometimes even mental health issues. Not all plans cover all needs, but they usually cover a combination of them.

Fee for service plans work by paying the health care provider a fee for each service they provide. Managed care plans come in difference types – health maintenance organizations (HMO), preferred provider organizations (PPO), and point of service plans (POS) – and offer comprehensive services to their clients. They also offer financial rewards for people who visit a list of physicians within a certain network.

After these basic types of service there are a few more terms that people should be aware of. A premium is a fee that you or an employer pays in exchange for the health insurance plan. A deductable is the amount a person must pay before their health insurance covers anything. Co-payments are the percentage of each cost that the patient needs to pay. All of these fall under the category or out-of-pocket costs.

This information is only the beginning, but it is a start for those wanting to better understand the U.S. health care system.

Comments