A health insurance plan is an insurance plan that pays for all or part of an insured person’s health care expenses. It depends on the type of health insurance coverage, it may either the insured person pays first, the costs of medical or surgical expenses out of pocket and receives reimbursement later on, or insurer (insurance company) makes payments directly to the service provider. The insured person must pay a fixed sum (premium) every year until a given period for the health coverage.
WHAT IS THE AIM OF HEALTH INSURANCE PLAN?
The main aim of the health insurance plan is to help people covering their health care costs. Health care costs comprise doctor visits, procedures, various tests, hospital stays, surgery, medicine, and other treatments as well as services.
WHAT ARE TYPES OF HEALTH INSURANCE PLAN?
There are four types of health insurance plan:
- Individual health insurance plan – This type of plan is especially for the individual.
- Group health insurance plan – This kind of health insurance plan offers health care coverage for student organizations, religious organizations, family, professional associations, employers, and other groups, etc. Mostly, many employers, organizations, or associations offer group health insurance plans to their employees, members, and their dependents as a medical benefit of working with. The employer, or organization, or association may pay for part or full insurance cost (premium).
- Worker’s compensation – It is a form of insurance which provides benefits for the payment of medical expenses incurred in treatment a work-related injury. In order to receive coverage for such treatment, it must be proved that the treatment is reasonable, necessary and related to the claimed injury.
- Government health insurance plan – A kind of health insurance plan which is totally administered by the government is called government health insurance plan. The rules and regulations of the government health insurance plan, and names vary by the countries or states. The undermentioned two plans are government health insurance plan which runs by the government.
- Medicare – It is the government administered health insurance program for the people who are 65 years old or older than this, for the certain younger people with disabilities, or people with End-Stage Renal diseases.
- Medicaid – It is also the government administered health insurance program, that provides free or low-cost health coverage. To receive such kinds of facilities participants must meet the certain criteria such as age, pregnancy, disabilities, income etc. because Medicaid insurance plan is especially for the people who has low-income, families and children, pregnant women, the elderly, and people with disabilities.
HOW ARE INDIVIDUAL AND GROUP HEALTH INSURANCE PLANS CLASSIFIED?
Both individual and group health insurance plans are classified into two classes:
- Fee-for-service (Traditional insurance) – Fee-for-service is a kind of group or individual health insurance plan in which the insurer (insurance company) reimburses the insured persons’ healthcare expenses.
Fee-for-service health insurance plan provides insured persons the freedom for choosing a doctor, hospital, or another healthcare providers. And they may receive medical care facilities anywhere according to your choices, it may in the country, or outside the country.
- Managed care – This plan is a kind of plan which have contracts with health care providers and medical facilities to provide care for members at reduced rates. This type of health insurance plans is sold to both, groups and individuals. There are some specific criteria in these plans, which should be met by the insured persons, which include, they are not freedom to choose doctor, hospital, or any other healthcare providers, they all are managed by the insurance company, approval is essential for some services, including visit to specialist doctors, surgical procedures, or various medical tests. They (insured persons) must obtain services from all kinds of healthcare providers such as doctors, laboratories, hospitals etc. affiliated with their managed care plan for the purpose of receiving the highest level of coverage.
There are three types of managed care health insurance plan.
- Health Maintenance Organization (HMO) – Health maintenance organization is a medical insurance group, which provides health services or arranges managed care for health insurance, self-funded health care benefit plans, individuals, and other organizations, acting as a liaison with health care providers such as doctors, hospitals, nurses and other health professionals on a prepaid basis.
- Preferred Provider Organization (PPO) – It is a managed care organization of healthcare providers such as medical doctors, hospitals, and other health care professionals who have agreed with an insurance company or a third-party administrator to provide healthcare at reduced rates to the top clients of insurance company or of administrator.
Point of Service plans (POS) – It has both characteristics of the health maintenance organization and the preferred provider organization. It is based on a managed care foundation therefore, it has more limited choice and lower medical costs. Insured persons have to choose a primary care physician (a physician who provides the first contact for a person with an undiagnosed health concern and continuing care of varied medical conditions) from within the healthcare network and this primary care physician becomes their point of service. There are certain facilities of referral system that primary care physician may refer outside the network, but with lesser compensation offered by the insurer. If the patient chooses to take treatment from outside network, the patient will be fully responsible to fulfill all required documents and maintain all accurate account of healthcare receipts.