Basics of Health Insurance

Everyone agrees that health insurance is something that is needed by all. But, what type of health insurance do you need? There are so many plans out there from which to choose and every time you turn around somebody is trying to sell you the latest "new and improved" health plan on the market. So how do you know which is the plan you should have?Let's look, first, at the different kinds of health plans and the major differences in each of them.Our first health plan is the HMO or Health Maintenance Organization. This is probably the most restrictive type of health insurance plan. You pay a "membership fee" to belong to an HMO and you can go to any of the healthcare providers who are part of the HMO for reduced healthcare expenses. If, however, you require services from a physician or hospital that is not a part of the HMO that you subscribe to you may find yourself high and dry without a health professional for the services you may need. Likewise, you have no benefits from your health plan if you go outside of the Health Maintenance Organization for services. If you're traveling or away from the service area of your HMO then, again, you may find yourself without health insurance just when you need it the most. Still, if you don't travel and only want a basic health plan the HMO might be right for you. If you are considering an HMO health plan then you need to do your research and make sure you have access to the healthcare professionals that you may need not just now but at some point in the future when you may or may not need the services of a specialist.Next is the PPO or Preferred Provider Organization. These are the plans which are probably the most popular and well known. They are similar to an HMO in that you get lower costs if you use the provider members of the PPO with which your insurance company has contracted. Most health insurance companies contract with more than just one PPO so that you have a broader range of healthcare professionals from which to choose. Most health insurance plans with a Preferred Provider Organization will still pay benefits if you go out of the PPO but with reduced benefits and higher deductibles.Health insurance plans were originally "indemnity" plans. These plans allow you to choose any doctor or other healthcare provider that you want to use. Benefits are paid directly to the insured person or they may be assigned to the healthcare provider if you so choose. Many indemnity plans being sold today also offer a PPO network that will help both you and the insurance company to keep expenses down to a more manageable level.Then we also have the "limited pay" plans. These plans are not major medical plans. They typically pay for doctor visits and/or hospital expenses but the amount that the insurance company will pay for any covered expense is specified in the insurance contract. If they pay for doctor office visits, for example, they will normally limit the number of visits that they will pay for in any calendar year and after that you will be responsible for the entire amount of the bill. While these plans are not major medical plans, they usually will pay in addition to any other plans you may have.Other types of health insurance include, critical illness plans, disability plans, Medicare, Medicare Supplements and Medicare Advantage plans. These plans will be covered in other articles since they should be explained individually and in depth.