What Is Comprehensive Medical Insurance?

Comprehensive Medical Insurance describes health insurance that provides coverage for most types of medical expenses. If you need health care insurance and are not yet eligible for Medicare, you have two options. You can buy it from your employer or you can buy it on the open market. Each option has the potential to provide a choice of four organizational models. However, your employer may or may not choose to offer you all four choices.

History

• Comprehensive health plans originated with industrialist Henry Kaiser and Dr. Sidney Garfield, who, at Kaiser's request, created a health plan to protect employees working on the Grand Coulee Dam (1930s). In the 1940s, the two men expanded the plan to include the thousands of workers Kaiser employed building Liberty Ships during World War 2. Other employers followed suit, and, by the end of the war, employer-provided fee-for-service insurance had become the foundation of the country's health care industry.

Cost

• Using comprehensive health care insurance involves paying premiums, deductibles and co-pays. You pay for your coverage with monthly premiums. Additionally, before your policy begins providing benefits, you must spend your own money until your out-of-pocket expenses equal the "deductible" listed on your policy. Finally, whenever you receive health care services, you must pay varying amounts, called "co-pays," for each service you receive.

Two Classes

• There are two general classes of comprehensive medical coverage: "Group" and "Individual." Your employer, union or professional organization sponsor group plans. Group plans typically provide the most benefits at the lowest price.
  Insurance companies also sell individual plans directly to the public. These plans are not the equivalent of employee-sponsored plans, however. Individually purchased health insurance usually provides fewer benefits at higher prices.

Types

• Fee-for-service plans (FFS) provide the most options and the fewest restrictions of the available health plans. You can use any provider you choose. Purchasing these plans on the open market can be expensive.
  Health maintenance organizations (HMOs) both insure and deliver health care. HMOs are the least expensive but most restrictive plans. You must live in an HMO's service area to join.
  Preferred provider organizations (PPOs) are more expensive than HMOs but less restrictive (referrals are not required, for instance).
  Point-of-service (POS) plans combine an HMO with a PPO and let their members decide whether to use HMO or PPO benefits. Cost and restrictions tend to average out between the HMO and the PPO models.

Alternatives

• With the exception of Medicare (for seniors) and Medicaid (for the truly poor), there are no comparable alternatives to comprehensive health care insurance in the United States. Most insurance companies do offer what they call "mini" or "supplemental" plans to provide additional reimbursement for specific activities in exchange for monthly premiums. These plans can be helpful supplements to---but are not replacements for---comprehensive health insurance plans.