Basics of Health Insurance
By Ernie Belmonte
With the high costs of medical care, health insurance is often necessary to help families and individuals from falling deep into financial debt. Health insurance can provide some financial protection if you suffer from a chronic illness, have a serious injury, or are in need of a physical exam. Yet obtaining health insurance is not always simple, and the many different terms and conditions associated with policies can be overwhelming. Before you choose a health insurance coverage plan, be sure to understand the basics.
How Health Insurance Works:
A health insurance policy is a contract between you and an insurance company that outlines how much of your medical bills the company will cover and how much you will have to pay out of pocket. Each month, you must pay a premium for the coverage, which varies depending on the policy you choose.
Many employers offer group insurance to their employees. Group insurance usually offers low rates because of the large number of people that pay premiums to the insurance company. However, group insurance plans are not available to everyone, such as those who are unemployed, self-employed, or are not offered insurance benefits from their employer. These people must often turn to individual health insurance, which is significantly more expensive than group insurance.
Types of Health Insurance:
The three different types of health insurance plans that you typically have to choose from include:
1. Fee-for-service plans: Traditional fee-for-service insurance plans offer the most flexibility when it comes to choosing a medical provider or physician, yet typically have the most expensive rates. You can see the doctor of your choice and upon receiving a bill, send a claim to the insurance company for reimbursement.
2. HMOs: Health Maintenance Organizations, or HMOs, offer lower rates with a more limited choice of doctors and medical providers. In order to receive specialty care that is covered through your HMO, your primary care physician must make a referral to a specific specialist.
3. PPOs: Preferred Provider Organizations, or PPOs, offer low rates and require you to choose a primary doctor and any specialty physicians through a network of doctors and institutions.
Shopping Tips for Health Insurance:
When selecting a health care insurance plan, be sure to shop around and compare quotes before making a decision. Take into account the type of coverage you may need, your medical history, and any dependants that you may have. Do you have any special health conditions? Are you planning on starting a family in the near future? Does your spouse or child need specific medications or health care? What is your current budget for health insurance? These are just a few questions to consider when shopping for a health care plan that works best for you.
About The Author
Ernie Belmonte writes for Joseph M. Wiedemann and Sons (http://www.jmwsons.com), leading providers of business and Chicago commercial insurance for more than 70 years. JMW & Sons is dedicated to providing top Chicago home insurance and business coverage to meet the exact budget and needs of clients.