Our health is out biggest asset – Good health allows us to work hard, make more money, and make our life better. Good health also allows us to be able to do things that make life so much enjoyable, cycling, trekking in the jungle for example. Our health can also end up being our biggest liability – stories of people turning from riches to rags because they have to pay hospital bills from several heart attacks are common today. It cannot be stressed anymore about how important it is to have some kind of health insurance as a protection from financial ruin.
But before you jump in the bandwagon and get yourself a health insurance, it is important to also understand the types of health insurance are there on offer.
Below are several common types on offer in North America:
#1 Indemnity Coverage – Indemnity coverage is probably the most flexible, and complete plans available. Policy holders could go to any hospital, see any doctors of their choice, and then the hospital will submit claims to your insurance provider for reimbursement. Of course not all sickness are covered – only those that are listed in the ‘list of covered medical expenses’ are claimable. Most procedures are covered however.
There are ways in which the plans could be tweaked. Some insurers offer co-insurance, in which if theres a claimable event, the insurance company will only pay 80%, and the policy holder foots the rest. This is arranged as a way to lower premium fees, and to prolong the coverage amount. Policy holders are encouraged to seek a lifetime coverage amount of $1 million.
#2 HMO Coverage – If you signed up for a Health Maintenance Organization (HMO) plan, instead of paying each time you receive service from an HMO, you pay a certain amount of money every month (premium). In return, these HMOs provide you with a range of health service and support. Some even offer you preventative care. A general practitioner will be assigned to you, and this doctor will coordinate and make decision on services that you will receive from the HMO. It is one of the most affordable health insurance plan in North America.
#3 PPO Coverage – Preferred Provider Organization (PPO) has more flexibility that the HMO plan, but not as comprehensive as the Indemnity Coverage. PPO plans allows you to see any doctor any time, though they would ‘prefer’ for you to visit doctors, hospitals and clinics within their PPO network.
This is achieved by charging a little more if you visit healthcare providers outside of their network. Often a co-payment of 20% has to be footed by the policy holder if they seeks services from outside the PPO network.
#4 POS coverage – Point Of Service plan is a combination of HMO and PPO plans. The plan allows you to appoint a doctor to coordinate for your healthcare (HMO), or you can self-direct your care at the healthcare provider of your choice (PPO).
If you are in need of healthcare, POS allows you several choices fo handle your situation. One is that you go the HMO way – seek the doctor appointed to coordinate your healthcare, and he will refer you to services within the network. You could also seek care yourself, PPO style.
These are the four most common types of healthcare insurance. There are also other types such as the Heatlh Savings Accounts (HSAs) that worth exploring. Do your homework, and decide on which one that will suit your requirements, and financial ability. Once you have made your decision, you could also find out ways to get the cheapest healthcare insurance of your choice.