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Healthcare Insurance Facts

Health care insurance often is one of the larger items in a family's budget. It also is one of the more difficult types of insurance contracts to understand. Learning what to look for in a health care policy helps.

  1. Types

    • There are managed care health insurance policies and indemnity policies. Indemnity policies pay for a health care provider of your choice. Managed care policies have a list of providers from which to select and normally cost less.

    Types of Managed Care

    • The first type of managed care plan was a health maintenance organization, or HMO. With an HMO, you have to use plan-approved providers or you don't receive benefits. Point of Service (POS) plans are similar with some payment for other doctors, but still require referral to a specialist by the primary care physician. Preferred Provider Organizations (PPOs) allow you to use any doctor, but pay less if that doctor is not on the plan's list of providers.

    Deductibles

    • An indemnity policy has a deductible that you pay first before the insurance company pays anything. PPO and POS policies sometimes have deductibles.

    Copays

    • Managed care policies have copays. A copay is a small amount you pay each time you use a health care provider, then the insurance pays the rest.

    Coinsurance

    • After you pay the deductible on a policy, normally you have a copay. An example is 80/20 to $10,000. This means that the insurance company pays 80 percent and you pay 20 percent until the amount reaches $10,000, when the insurance company begins to pay the entire bill.

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