Insurance Health

- Health Insurance I. Introduction: Health insurance provides coverage for medicine, visits to the doctor or emergency room, hospital stays and other medical expenses. Policies differ in what they cover, the size of the deductible and/or co-payment, limits of coverage and the options for treatment available to the policy holder. Many people receive health insurance from their employer as a benefit, but others must shop around for the right policy.

Health Insurance Policies:

Health Maintenance Organization (HMO) - An HMO is a type of managed health care system. A group of doctors and other medical professionals offer care through the HMO for a flat monthly rate with no deductibles. However, only visits to professionals within the HMO network are covered by the policy. All visits, prescriptions and other care must be cleared by the HMO in order to be covered. Your primary physician within the HMO will handle referrals.

Preferred Provider Organization (PPO) - A PPO is similar to an HMO, but care is paid for as it is received instead of in advance in the form of a scheduled fee. PPOs may also offer more flexibility by allowing for visits to out-of-network professionals at a greater expense to the policy holder. Visits within the network require only the payment of a small fee. There is often a deductible for out-of-network expenses and a higher co-payment. You will have a primary physician within the network who will handle referrals to specialists that will be covered by the PPO. After any visit, you must submit a claim and you will be reimbursed for the visit minus your co-payment.

Fee-For-Service (FFS) - FFS plans (also called indemnity plans) allow for visits to any medical professionals. These plans are extremely flexible, allowing you to make most of the decisions about your personal care. After the visit, you pay the bill and then submit a claim to the insurance company for reimbursement. The only limitations are that services provided must be specified in the policy in order for a claim to be accepted. These plans fall outside the label of managed care, and the result is higher deductibles and co-payments.

Medicare - Medicare is a federal program which provides health insurance for qualified individuals over the age of 65. Enrolled individuals must pay deductibles and co-payments, but much of their medical costs are covered by the program. Medicare is less comprehensive than the above programs, but it is an important source of post-retirement health care.

- Medicare is divided into three parts. Part A covers hospital bills, Part B covers doctor bills, and Part C provides the option to choose from a package of health care plans. You should enroll as soon as you qualify because, at that time, you can receive coverage even if you have health problems. Later you may no longer qualify, so this free period is very important.


COBRA is a federal program that allows employees to remain on their company health plans for up to 18 months after leaving the employer by paying insurance premiums out of pocket. The system is designed to prevent people who are between jobs from experiencing a lapse in coverage.

HIPAA is an Act of Congress that gives people the right to insurance coverage from any provider as long as they have been covered by a group policy in the previous 63 days. Even people with serious illnesses must receive coverage from any carrier if they can pay the premium costs, which are not regulated by HIPAA.

Choosing a Policy: Managed care (such as an HMO or PPO) offers significant coverage at a low cost in premiums and deductibles. However, the plans can be inflexible and some visits, medications and treatments may not be approved by the insurer. Indemnity plans (FFS) are more expensive overall and per visit, but you can manage your own care as long as it falls within the guidelines for coverage in your policy. Group coverage, such as that available from your employer, usually offers more coverage at a lower cost than individual policies. Group coverage is usually preferable when it is available. Policy coverage ranges from only catastrophic illness ("major medical") to every doctor's visit. Your needs will depend on your health history, the amount of insurance you can afford, and the needs of your dependents.

Policies may include provisions for dental care, eye care and prescription drugs, or additional policies can be purchased to cover these expenses. Plans should be scrutinized for information about in-network and out-of-network coverage and responsibilities because the coverage in each situation can vary from company to company.

Keep in mind that these decisions may be made for you if you get health insurance from your employer, but it is still necessary for you to thoroughly investigate the policy to understand how you are covered and to determine if you need any additional health insurance for your particular situation.

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