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Health insurance is an excellent medium to pay for your medical expenses. It provides you with adequate cover for the various bills that you have to pay when you fall ill. A single visit to a doctor costs you hundreds of dollars for a minor illness and thousands of dollars if your problem is even mildly severe. Forget about the serious cases.
Health insurance helps you in paying these medicial bills. Depending on your requirement, there are different types of plans offered by various health insurance companies. These are:
- Traditional plan: In the traditional plan, the medical expenses are paid out – of – pocket and then the insurance company reimburses majority of the bill. You can choose any doctor or medical service provider in this type of plan.
- Fee for service plan: Fee for service plans involve more out-of-pocket expenses. They are used to cover your bills only once you have paid the deductible, which is part of the contract, on your own.
- Manange care plans: In managed care plans, there is an option of choosing a doctor or a physician from an existing network of healthcare providers. They offer financial incentives to you to select from their network.
There are three types of managed care plans.
- Preferred Provider Organizations (PPO) offers lower fees if you choose from a network of health care providers. With a PPO, you can choose your own specialist without getting approvals as long as they belong to their network. This usually has a benefit of lesser out-of-pocket expenses.
- Point-of-service (POS) plans are similar to PPOs in that you have to choose from a network of physicians. Once chosen this physician will coordinate all your medical needs. When you need to consult with a specialist, you first have to go to your physician who will then refer you to a specialist. You can choose your own physician. But this involves a lot out-of-pocket expenses and lots of other formalities. POS plan offers preventive care services and organizes a lot of health improvement programs which could be nutrition workshop or workshop on smoking cessation and maybe even discounts at health clubs.
- Health Maintenance Organizations (HMOs) is a cheap but not a flexible type of health plan. They also tend to lean towards members of group plans than individuals. One of the important benefits of HMO is that they provide preventive care services and other health improvement programs. HMO is least flexible in that you can only consult the in-house doctor or the doctor in their network. But for this they charge you less premiums and there are few administrative procedures to be followed before you are given the coverage.
Some of the companies that offer medical insurance in the US are Assurant, Humana, Golden rule, United American. All these companies have received high ratings from various credit rating agencies. They offer a variety of plans from which the one that best suits the insurer’s needs can be chosen.
This article was contributed by Prerna Mordani.
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