Health Insurance

With the rising costs in medical care, health insurance is a vital commodity to have these days. But with all of the options and different types, choosing between health insurance policies can be overwhelming. Health insurance policies typically fall into two categories – indemnity plans and managed care plans.
 

Healthcare Flexible Spending Plans
Flexible spending plans are indemnity plans that are usually offered by a person's employer. However, the employee can design their own benefit package to meet their health care needs. Some of these types of plans include a pre-tax conversion plan, medical plans plus flexible spending accounts and pre-tax conversion plans, among others.

"Basic and Essential" health plans are indemnity plans with more limits and restrictions, but they are less expensive than other indemnity plans. Premiums are also based on a person's health status, gender, occupation and age. As a result, these plans could be rather costly depending on a person's perceived risk and needs.

Health Savings Accounts, or HSAs, are basically savings accounts that allow people to save money tax-free for their health care needs. There are no premiums with HSAs, but they will help you pay any health-related out-of-pocket expenses.

High-Deductible Health Plans, or HDHPs, are plans that cover the insured only for catastrophic health events. However, the insured is usually responsible for a high deductible before this type of plan kicks in.

Managed Care Health Plans
Managed care options are typically less expensive than indemnity plans, but they are more restrictive. There are basically three types of managed health care plans from which you can choose.

POS Health Plan
Point-of-Service, or POS plans involve referrals among doctors within your plan. Your services are covered if your primary care doctor refers you to another doctor. However, if you refer yourself to another doctor, you are responsible for a percentage of the coverage.

Health Maintenance Organization Health Insurance Plan
Health Maintenance Organizations, or HMOs, are plans that in which you are basically managed by your primary care physician. Your doctor refers you to other doctors if necessary and the HMO plan pays most of the cost. You are generally responsible for a small co-payment, but there are fewer out-of-pocket expenses than with other plans.

Preferred Provider Organizations Insurance Plan
Preferred Provider Organizations, or PPOs, are managed care plans that involve healthcare services within a network. These plans typically pay health care providers based on a discounted fee schedule. You can go out of the network, but you will be responsible for the difference in cost.

Other than indemnity health plans and managed care plans, there are also government-sponsored plans that cover children, senior citizens, disabled persons, Native Americans, military personnel and those who typically cannot afford health care.

When choosing the health care plan that's right for you, evaluate your needs realistically and make a decision based on that. It's the best way to ensure you're not paying premiums and expenses for options that you will never use.