Health insurance or also known as medical insurance is a type of insurance product that specifically guarantee the cost of health care of the health insurance members if they fall ill or have an accident. Joining a health insurance means that you have careful planning in anticipation of the worst possibilities in terms of health problems. Nowadays, having a health insurance seems increasingly important considering the cost of care and treatment of disease become more expensive and unpredictable.
Here are some reason why you should have a health insurance:
1. The cost of health care is getting more expensive, this is including the cost of hospital and drug.
2. As a protection of yourself and your family, because health or disease can not be predicted.
3. To minimize the expenditure during illness or when dealing with hospital.
You can purchase health insurance on individual or group basis. Group health insurance generally provided by employer or organization, such as federal societies, college health departments, or labor unions. You employer usually pays part or all of the cost of employees’ health insurance. If your employer doesn’t fully cover the cost or if you are self employed, then you may need to cover it with individual medical insurance. You can adjust the health insurance with your needs and also choosing the health insurance provider by yourself. If you decided to join individual health care plans, you should read about how to choose the right health insurance.
Health insurance providers is in contract with doctors, hospitals, clinics, and other health care provider such as pharmacies, labs, x-ray centers, and other medical equipment vendors. Thus the health insurance company requires you to seek treatment only to their contracted network or preferred network.
Most Americans are enrolled in some type of managed care plan, which is Health Maintenance Organizations (HMO), Preferred Provider Organizations (PPO), and Point of Service (POS). POS is the less common type and combine thefeatures of HMO and PPO. The differences between HMO and PPO are:
Health Maintenace Organization
If you are enrolled in this type you will need to receive most or all of your health care from network provider. In this plan, you will require to select a PCP (primary Care Physician), PCP is responsible for managing and coordinating all of your health care. PCP also act as your personal doctor to provide all of your basic healthcare services. If you need care from specialist or diagnostic services such as lab test, your PCP will have to provide you with a referral. If you don’t have a referral or decide to go to a doctor outside your HMO network, you will have to pay most or all of the cost.
Preferred Provider Organizations (PPO)
PPO is a health plan that has contract with a network of preferred provider that you can choose. So, you don’t have to select your PCP nor referrals to see other providers in the network. If you use the doctor in the preferred network you will only be responsible for your annual deductable and a copayment for your visit. But if you seek health care that is not on the preferred network you will pay a higher amount. And, you will need to pay the doctor directly and file a claim with the PPO to get reimbursed.