What is Health Insurance?
Why is health insurance so important? Health is a fragile thing and it doesn't take time to fall sick. If its flu, you will get well in a week but if it's something that requires medication over a month like Jaundice then the costs of medication can become overbearing. You will have to visit the doctor once a week, there are different medications, tests and all this can become quite an expensive affair. The best way to fight is to purchase health insurance. The main idea behind buying a health insurance policy is to protect yourself financially. Health insurance policies can protect you and your family.
There are basically four important types of health insurance and they are:
Preferred Provider Organizations (PPOs)
Preferred provider organizations are basically a combination of HMO's and traditional fee-for-service plans. PPO's as they are known also have limited affiliations in terms of doctors and hospitals. When you visit the doctors or hospitals mentioned in their list then most of your medical bills will be taken care of under the PPO. Some of the services of PPO also require you to pay a deductible and coinsurance.
Health Maintenance Organizations (HMOs)
Health maintenance organizations or HMO's are basically prepaid health plans. If you become a member of HMO then you will have to pay a monthly premium. HMO will provide you with a comprehensive care policy that is applicable for you and your family. This health insurance benefit will take care of doctor visits, hospital bills, medical emergencies, surgical procedures, laboratory tests, etc. The only drawback of this policy is that HMO has agreements with limited number of hospitals and doctors. Hence you will be able to benefit from this policy if you visit the doctor or hospital mentioned in their list.
Point-of-Service Plans (POS)
There are many health maintenance organizations that provide a kind of indemnity option which is referred to as the POS plan. In this type of a health insurance plan, the primary care doctors can make referrals to other providers within the plan. If the doctor makes the referral then all your bills and medical expenses will be taken care of but if you refer outside the plan then you will have to pay coinsurance.
The fee for service plans are the traditional health care policies. In this policy your insurance will take care of the medical or doctors fee for certain services that are mentioned in the policy. This is one of the popular policies that are favored by most hospitals and doctors. Under the provisions of this policy, you can even visit a doctor in a different part of the country or state. This health insurance policy will only pay a part of the expenses incurred in the form of doctor's fee or medical bills. The insurance payments will start only after you pay a certain amount of deductible upfront. Normally a typical fee for service health insurance plan the deductible will be $250 per person in your family.