About Different Types of Health Insurance

Health insurance is a detailed plan and coverage system that helps a person pay for medical costs. With this type of insurance, after a patient has gone to a doctor for a medical condition, the health insurance company helps pay the medical fees based on the agreed upon conditions. In return, the patient typically pays a monthly premium.

History

• The idea of health insurance has been around for hundreds of years. In around the late 1600s, Hugh Chamberlain came up with the idea of accident insurance. This proposed plan was offered to help people who have gained some sort of disability as a result of an accident. Accident insurance is very similar to what we call disability insurance in modern times. Beginning in the 19th century, many private companies were offering accident insurance. However, this did not cover health expenses at a doctor or hospital. Eventually, accident insurance was transformed into modern day health insurance in the first half of the 20th century.

Types

• A wide variety of health insurance plans exist today in the United States. Typical health insurance, sometimes known as fee-for-service plans, include a deductible that must be paid up front by the patient. After that point, the health insurance company will pay for a vast majority of the medical costs. Preferred Provider Organizations (PPOs) plans are similar but instead use a predetermined network of medical providers with the promise of lower rates. Point of Service (POS) plans include the use of a primary care physician that makes referrals to other doctors when needed. Health Maintenance Organizations (HMOs) plans are a type of group insurance that offers low monthly pay, but is also considered to be the least flexible. Additionally, governmental health care, such as Medicaid, help families who cannot afford health insurance.

Features

• The features of a health plan are sometimes quite complicated. Several contractual specifications make up a health insurance plan including premiums, deductibles, coverage limits, co-payments, exclusions and capitations. These components dictate what exactly the health insurance will cover and how much it will cover, while also dictating how much the patient will have to pay on a monthly basis.

Benefits

• Health insurance plans in general are beneficial to society. Plans help people who can afford it get the proper medical attention they need without worrying too much about the price of the fees and services. Governmental health plans help the people who cannot afford regular health insurance get the medical attention they need. The health insurance market has generated an industry of its own that generates billions of dollars per year and has provided jobs to millions of people around the world.

Misconceptions

• Some people claim that health insurance providers are immoral because providers raise your rates even if you do not have any claims. However, the raising of rates typically happens based upon age, where you live and other uncontrollable factors. It is essential to look over your plan for these clauses to avoid conflict in the future. Another misconception is that insurance companies can pick what claims are paid for. That is simply not true because the law states companies have to pay for all the claims that the plan provides or pre-approves. Also note that in other industries, the word "covered" usually implies that the whole bill will be paid. However, in the health insurance industry, stating something is covered doesn't guarantee that 100 percent will be paid. Instead it depends on the specifics in the contract.