What Types of Health Insurance Are Available?
Major Medical Plans
This type of policy is usually effective in covering serious illness or injury where costs are high. Hospital care, drugs and doctors’ visits, are usually covered. These benefits can be delivered in several different ways:
- Indemnity plans - These major medical plans typically have a deductible – the amount you pay before the insurance company begins paying benefits. After your covered expenses exceed the deductible amount, benefits usually are paid as a percentage of actual expenses, often 80 percent. These plans usually provide the most flexibility in choosing where to receive care.
- Preferred Provider Organization (PPO) plans – In these major medical plans the insurance company enters into contracts with selected hospitals and doctors to furnish services at a discounted rate. As a member of a PPO, you may be able to seek care from a doctor or hospital that is not a preferred provider, but you will probably have to pay a higher deductible or co-payment.
- Health Maintenance Organization (HMO) plans – These major medical plans usually make you choose a primary care physician (PCP) from a list of network providers. Your PCP is responsible for managing all of your health care. If you need care from any network provider other than your PCP, you may have to get a referral from your PCP to see that provider. You must receive care from a network provider in order to have your claim paid through the HMO. Treatment received outside the network is usually not covered, or covered at a significantly reduced level.
- Point of Service (POS) plans – These major medical plans are a hybrid of the PPO and HMO models. They are more flexible than HMOs, but do require you to select a primary care physician (PCP). Like a PPO, you can go to an out-of-network provider and pay more of the cost. However, if the PCP refers you to an out-of-network doctor the health plan will pay the cost.
Limited Benefit Plans
These types of policies provide limited coverage for a particular health care setting, ailment or disease. Here are some of the options that may be available to you:
- Basic Hospital Expense Coverage – Covers a period of usually not less than 31 days of continuous in-hospital care and certain hospital outpatient services.
- Basic Medical-Surgical Expense Coverage – Covers costs associated with a necessary surgery, including a certain number of days (usually not less than 21 days) of in-hospital care.
- Hospital Confinement Indemnity Coverage – Covers a fixed amount (usually not less than $40) for each day that you are in a hospital. The benefits paid are not based on your actual expenses.
- Accident Only Coverage – Covers death, dismemberment, disability or hospital and medical care caused by an accident. Specified accident coverage that covers only certain accidents may also be purchased.
- Specified Disease Coverage - Covers diagnosis and treatment of a specifically named disease or diseases – such as cancer.
- Other Limited Coverage – You may purchase insurance covering only dental or vision or other specified care.
Additional Coverage Options
These types of policies provide added protection should you become disabled, require long-term care, or enroll in Medicare:
- Disability Income - This coverage provides for weekly or monthly benefit payments while you are disabled after a covered injury or sickness. The disability payment is usually a set dollar amount not to exceed a certain percentage of you income. These policies usually expire when you become eligible for Medicare.
- Long-Term Care Insurance - This policy usually pays for skilled, intermediate and custodial care in a nursing home, and also for care in other settings, such as the home, adult day care center or assisted living facility. The policy usually pays a fixed amount per day while a person is receiving care.
- Medicare Supplemental Coverage - The federal Medicare program pays most medical expenses for people 65 or older, or for individuals under 65 receiving Social Security disability benefits. However, Medicare does not pay all expenses. As a result, you may want to buy a Medicare Supplement policy that helps pay for certain expenses, including deductibles not covered by Medicare.
These are NOT health insurance plans:
- Non-Licensed Risk-Sharing Plans
You may receive offers to join a group or association that will take your monthly payments, put them in a savings account (or trust) with other participants’ money, and then help pay some of your health care costs, as needed. Such arrangements are not insurance and the participants do not have the protections available to purchasers of licensed insurance plans. Insurance commissioners strongly recommend that you thoroughly investigate such plans before joining.