Questions Terms Links

  • Why do you need health care insurance?
Health care costs are very high. If parents are planning to have children, then the mothers to be need to have checkups frequently. Seeing a doctor frequently is costly. Health insurance alleviates the expenditure that parents/parents to be have to make. Also, after the child is born, the child must see a doctor frequently for checkups and physicals. If there is an emergency, health insurance helps pay most of the costs associated with the emergency.
  • What types of insurance policies are there?
There are two main types of insurance: group insurance and individual insurance. Group insurance is usually covered by your job or the job held by someone in your family. In many cases, the employer pays for the cost of the insurance. Individual insurance can be added to group insurance if the group policy is limited. Usually, these are more expensive and may not offer as many benefits as group insurance.
  • What types of insurance are there?
There are three major types of insurance. They are Fee-for-Service, HMOs, and PPOs.

Fee-for-Service is the "traditional kind of health care policy." There are three categories in this insurance: basic, major medical, and comprehensive - combining the two. You have your choice of doctors and hospitals. The insurer pays part of your doctor and hospital bills. You pay a premium - a monthly fee, a deductible - usually paid yearly before the insurance pays for your medical bills that are covered under the policy, and coinsurance - a percentage of the expenses. You may also have to fill out forms and send them to your insurer. "You are responsible for keeping track of your receipts for drugs and medical costs/expenses." Most policies have a limit of how much you will pay for medical bills in one year. You reach your "cap" when your deductible and your coinsurance total a certain amount. Then the insurance company pays for the "full amount in excess of the cap for the items your policy says it will cover." Premiums do not count towards this cap. You are responsible for making sure that you are covered for preventive care and immunizations and well-child care. Also, if your doctor charges a certain fee for a service which is higher than any other doctor in the area, your insurance company will pay the "going rate" - reasonable rate, and then you will be billed the rest of the fee. This is usually called a "customary fee".

HMOs, Health Maintenance Organizations, are prepaid health plans. You pay monthly premiums, and the HMO provides "comprehensive care for you and your family." You may have to pay a co-payment, usually not more than $30. HMOs are most concerned with preventative health care because doctors receive a fixed fee for your medical care. In many cases, doctors work directly for the HMO. In others, doctors are contracted to care for members. You are either assigned or may choose a doctor who will be known as your primary care doctor. If you need another type of care, then that doctor is responsible for referring you to another doctor. In this case, you must get the referral before you see another doctor.

PPOs, Preferred Provider Organizations, are a combination of Fee-for-Service and HMOs. Within PPOs, your choices are limited, but if you want to keep your doctor, you can if you are willing to pay for their services if they are not a part of the network. When you see a doctor or use a service recommended by the PPO, then the insurance pays for your bills. In most cases, you may have to pay a copayment. Like Fee-for-Services, for some services, you will have to pay a deductible and coinsurance. PPOs are like HMOs in the fact that they focus on preventative medicine.

There are other types of insurance for people as well. Medicare is a federal health program for Americans 65 and older and for certain disabled Americans. Disability Insurance is insurance that people apply for when they have a "long-term illness or injury and cannot work." Hospital Indemnity Insurance offers limited coverage. For example, if you need to be in the hospital for a certain amount of days, then the insurance pays you a "fixed amount for each day." Long-Term Care insurance is usually needed when someone needs to be in a nursing home.

One important type of insurance is Medicaid, a Federal program operated by the States. People who may qualify for Medicaid are people from low-income families, the elderly, blind, disabled, and some people in families with dependent children.
  • How can I choose which type of health insurance is right for me and my family?
Choosing a health care insurance plan requires you to do the research. There are many choices when it comes to choosing which plan is ideal for you. It is recommended that you know what your needs may be and what you can afford. Review the plan regularly and change it based on what your needs are. People you may want to ask are your doctor or your car/home/life insurance agent.

  • Coinsurance:
The amount you are required to pay for medical care in a fee-for-service plan after you have met your deductible. The coinsurance rate is usually expressed as a percentage. For example, if the insurance company pays 80 percent of the claim, you pay 20 percent.
  • Coordination of Benefits:
A system to eliminate duplication of benefits when you are covered under more than one group plan. Benefits under the two plans usually are limited to no more than 100 percent of the claim.
  • Copayment:
Another way of sharing medical costs. You pay a flat fee every time you receive a medical service (for example, $5 for every visit to the doctor). The insurance company pays the rest.
  • Covered Expenses:
Most insurance plans, whether they are fee-for-service, HMOs, or PPOs, do not pay for all services. Some may not pay for prescription drugs. Others may not pay for mental health care. Covered services are those medical procedures the insurer agrees to pay for. They are listed in the policy.
  • Deductible:
The amount of money you must pay each year to cover your medical care expenses before your insurance policy starts paying.
  • Exclusions:
Specific conditions or circumstances for which the policy will not provide benefits.
  • HMO (Health Maintenance Organization):
Prepaid health plans. You pay a monthly premium and the HMO covers your doctors' visits, hospital stays, emergency care, surgery, checkups, lab tests, x-rays, and therapy. You must use the doctors and hospitals designated by the HMO.
  • Managed Care:
Ways to manage costs, use, and quality of the health care system. All HMOs and PPOs, and many fee-for-service plans, have managed care.
  • Maximum Out-of-Pocket:
The most money you will be required pay a year for deductibles and coinsurance. It is a stated dollar amount set by the insurance company, in addition to regular premiums.
  • Noncancellable Policy:
A policy that guarantees you can receive insurance, as long as you pay the premium. It is also called a guaranteed renewable policy.
  • PPO (Preferred Provider Organization):
A combination of traditional fee-for-service and an HMO. When you use the doctors and hospitals that are part of the PPO, you can have a larger part of your medical bills covered. You can use other doctors, but at a higher cost.
  • Preexisting Condition:
A health problem that existed before the date your insurance became effective.
  • Premium:
The amount you or your employer pays in exchange for insurance coverage.
  • Primary Care Doctor:
Usually your first contact for health care. This is often a family physician or internist, but some women use their gynecologist. A primary care doctor monitors your health and diagnoses and treats minor health problems, and refers you to specialists if another level of care is needed.
  • Provider:
Any person (doctor, nurse, dentist) or institution (hospital or clinic) that provides medical care.
  • Third-Party Payer:
Any payer for health care services other than you. This can be an insurance company, an HMO, a PPO, or the Federal Government.


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