Health Insurance

About Individual Health Insurance

Individual health care insurance provides coverage for only one individual, or family. In general, individual plans are more expensive than group insurance. You can obtain individual plans directly from a company who offers them. The company with whom you apply will evaluate you from a health standpoint, in terms of how much risk you present to them. Usually, they'll provide a questionnaire for you to fill out, asking various questions about your current and past health history. They will determine your risk accordingly, from which a premium will be generated.

Things to look for:
Most individual plans fall under managed health care plans. Under this, you can opt for an HMO, PPO, or POS plan.

Guaranteed renewable:
Your insurer cannot cancel your coverage if you become sick. If you continue to pay your insurance premium, coverage continues.

If available, group insurance is generally a better option, since it is usually more comprehensive and less expensive than individual insurance. However, individual coverage is ultimately better than being uninsured in the event of illness or injury. Although you may think you can do without health insurance, you are taking a major risk if you choose not to get coverage. An unexpected illness or serious injury can put you and your family under financial stress.

In a group insurance situation, the provisions of the policy are negotiated between the insurer and master policy owner (usually an employer or association). With individual insurance, you are directly in control of your policy. You can negotiate to have certain provisions included or excluded, and you can often choose your deductible amount and co-payment percentage. Keep in mind, however, that these things will have an effect on your premiums.

About Group Health Insurance

The continuing growth in the number of insurance plans where the employer or union assumes all or part of the responsibility for paying claims made the nations employers a principal bearer of the financial risks of illness and non-job-related injury in 1990. Group health insurance is better than individual in most cases- your premium will be lower, and your options greater. If you cannot receive group insurance coverage through your employer, then you'll need to seek out an individual plan.

2 basic group plans:
--fully insured
--MPP (minimum premium plan)

Under fully insured, your employer accepts all the risk for paying your claims.

Under MPP, your employer pays up to a certain specified maximum; after which point, the insurer pays. Most of these plans offer several types of coverage:

--basic coverage
--major medical coverage
--basic, plus major medical coverage

Majority of these plans fall under major medical, and don't contain a basic hospital benefit for hospital related expenses.

Employers Offering Health Insurance
Coverage varies from industry to industry. Most, if not all, state and local government agencies offer health insurance. Goods-producing firms are more likely to provide health benefits than are service-producing firms.

Coverage is less commonly offered by firms employing significant proportions of low-wage workers, that have a large proportion of part-time workers, or that experience high employee turnover.

Managed care plans fall into 3 basic types plans:

-HMO
-PP0
-POS

A common trait among managed care plans is the incentive (usually, a lower premium) for the insured to stay within a specified network of health care providers.

Health Maintenance Organizations (HMOs)
HMOs provide medical treatment on a prepaid basis, which means that HMO members pay a fixed monthly fee, regardless of how much medical care is needed in a time period (usually a monthly basis). In return for this fee, most HMOs provide a wide variety of medical services, from office visits to hospitalization and surgery. There are exceptions but most HMO members must receive their medical treatment from those within the network.

Preferred Provider Organizations (PPOs)
A PPO is made up of doctors and or hospitals that provide medical service only to a specific group. Rather than prepaying for medical care, PPO members pay for services as they are provided. The PPO sponsor (usually an employer or insurance company) usually reimburses the member for the cost of the treatment, minus any co-payment fee. In some cases, the doctor may submit the bill directly to the insurance company for payment. The insurer then pays the covered amount directly to the health care provider, and the member pays his or her co-payment amount. The price for each type of service is negotiated in advance by the health care providers and the PPO sponsor(s).

Point Of Service (POS) plans
A point of service plan is a type of system where you pay no deductible and usually only a small co-payment when you use a health care provider within your network. You also must choose a primary care physician who is responsible for all referrals within the POS network. If you choose to go outside of the network for health care, you will likely be subject to a deductible, and your co-payment will be a percentage of the physicians charges.

About Hospital Health Insurance

Hospital expense coverage provides specific benefits for daily hospital room and board and usual hospital services and supplies during hospital stays.

Hospital/medical coverage may be extended in one of three ways:
-- A policy usually sold in combination with a physicians or surgical expense policy that provides benefits for both surgical operations and doctors in-hospital visits

--A major medical policy that provides broad and substantial coverage for many types of medical expenses

--A combination of hospital-physician-surgical coverage plus a supplemental major medical policy.

Room and board benefits are usually stated in one of two ways.
--Indemnity plans reimburse for the actual room-and-board charge up to a specified maximum dollar amount per day for hospital confinement.

--A service-type benefit that pays the full cost of a “semi-private” room-and-board charge.

About COBRA Health Insurance

COBRA is an acronym, which stands for Consolidated Omnibus Budget Reconciliation Act of 1985. Under this federal law, you are provided with a “back-up” system in a time of need, when you aren't currently covered by insurance for a variety of reasons.

This law was put in place to protect your right to continued health insurance, after a circumstance occurs which would otherwise leave you without coverage.

Some of those circumstances:
-involuntary loss of employment (lay off, downsizing, terminated)

-voluntary termination of employment (you quit)

-marital separation or divorce

-if you were a dependent on your guardian/parent’s policy, and you become ineligible (no longer dependent), due to age or no longer attending college

-if your spouse (who is the employee with the insurance coverage) dies

COBRA allows you to have the same coverage you had prior to the event/circumstance. The one thing to take note of is that your continued health benefits will only last for a specific amount of time, and will be entirely at your own cost. Under most cases, the time frame for continued coverage lasts 18-36 months.

A quick example:
You are currently employed, and your company pays for 50% of your insurance premium. You are included in a downsizing effort by your employer, and receive notice of termination. You can opt for COBRA, which will allow you to continue coverage. Instead of the 50% you had prior to termination, you will now be faced with 100% of the insurance premium cost. In some cases, this might be even higher, with the added cost going to administrative fees charged by your ex-employer. As mentioned above, the time frame can be anywhere from 18-36 months.