Who Does Private Health Insurance Cover?

Private health insurance plans provide medical coverage to individuals of all ages. Millions of people are covered by health policies that are bought directly from insurance companies or through their employers. These policies help pay for the costs of medical services needed by the insured to stay healthy or recover from illnesses or injuries. Insurance companies, however, don't provide coverage to all individuals who apply for health insurance.

Types of Private Health Insurance Policies

• Indemnity health and managed health-care plans are two types of private health insurance options available in the United States. Considered the nation's traditional health plans, indemnity health insurance provide members maximum freedom and flexibility with their health decisions, as they're able to seek medical care from doctors of their choice. These are fee-for-service plans and reimburse members for medical expenses after they've received their services. Members are responsible for submitting claims correctly to receive timely payments from their insurers.

Managed Health-Care Plans

• Managed health-care plans are designed to provide affordable coverage with quality medical services. Insurers of these plans contract groups of doctors to provide medical care at discounted rates in exchange for patients. Members are provided with a group of doctors in their geographical locations and pay less out of pocket. However, this isn't the case if members decide to use other doctors that aren't within the network. Since rates aren't negotiated with non-network physicians, members pay higher deductible and coinsurance amounts for these visits and, in certain cases, are responsible for their entire doctor bill without insurance coverage.

Considerations

• Health insurance plans are paid by premiums, which are based on the information submitted by the applicants. For individually owned policies, insurance companies accept or deny applicants based on their personal information, such as their ages, health statuses, gender and occupations. Applicants are also subject to medical examinations and background checks. For group plans, premiums are based on the information submitted by all members. Lower premiums represent less risk to the insurers. For example, premiums rates are lower when healthy people outnumber those who have medical conditions.

Group vs. Individual Health Plans

• Under group-sponsored health plans, all eligible applicants are granted coverage regardless of their medical histories. Members also pay lower premium amounts since employers pay over 70 percent of the insurance costs, according to the National Coalition on Health Care. However, an individually owned policy is portable and can be taken with its owner if he decides to change jobs. These health policies can also be tailored to meet the policyholder's needs. He has the authority to either add plan features and options that benefit himself and/or his family or eliminate those that aren't needed to save money.

Preexisting Conditions

• It may be hard for individuals to obtain private health insurance if they have preexisting conditions, which are medical problems that individuals have before they applied for insurance. If they are granted coverage, they're faced with higher premiums and restrictions. The most common preexisting conditions include diabetes, arthritis, pregnancy and obesity. If insurers grant individuals with preexisting conditions coverage, they impose waiting periods that restrict payment for treating these medical conditions for a period of time --- typically 12 to 18 months, according to Med Health Insurance. However, if these individuals can't get insurance on their own, they can apply for coverage through government-sponsored health plans such as Medicaid or state-run "high-risk pool" programs.