Health Insurance

Health Insurance Overview

A health insurance plan pays providers, such as doctors and hospitals on behalf of individuals receiving care. It is a type of insurance that helps cover the cost of medical and surgical needs. Additionally, some health plans have benefits for vision, eye and dental care as well as prescription drugs. By law, health care must be available to all.

Individual plans are usually purchased by the self-employed or by those whose employers do not provide health plans. Employers purchase group plans on behalf of their employees. The employer pays a portion of the premium and establishes the criteria necessary to receive coverage. All employees who meet those criteria must be allowed to participate in the plan.

Insurance premiums are generally paid in monthly installments. In addition to the premium, health plans often have yearly deductibles that must be met before the insurer pays for covered services. Some plans require the insured to pay a co-payment when services are provided.

Health Maintenance Organizations (HMO) and Preferred Provider Organizations (PPO) are two of the major types of health plans. Each participant in an HMO must name a Primary Care Physician (PCP) to manage treatment and provide referrals to specialists. An HMO will generally not pay for services provided by doctors who have not contracted with them.

A PPO has a network of providers that the insured may receive services from. If providers outside of the network are used, a smaller percentage will be paid for covered services. A PPO does not require referrals to see specialists.

Providers of health insurance are either commercial providers or government providers. Blue Cross Blue Shield, United Health Care, and Aetna are examples of commercial insurers. Government insurers include Medicare, Medicaid, and Tricare.

An important benefit of having health coverage is that by law, all plans must cover certain preventative services. Routine preventative care can be an aid in the prevention and early detection of medical conditions. Also, having coverage may ease the financial burden of expensive procedures or medications proving to be a worthwhile investment.