You’ve heard it before; accidents happen. You may have not paid much attention to it before, but there’s a great deal of truth in this oft-quoted statement. That being said, it’s important to always have good health insurance, because without it, you may be putting yourself in serious financial straights. Below, we’ve provided short summaries in order to help you understand the types of coverage out there so that you won’t be caught in a regrettable predicament that could cost you and your family for years to come.
Health Insurance…In General. General Health Insurance refers to many different types of insurance policies. These range from policies that cover the costs of physicians and hospitals to those that meet specific needs, such as the necessity to pay for care, long-term. Even disability insurance—which replaces lost wages if you are unable to work due to sickness or accident—is considered health insurance, even though it’s not specifically for medical expenses. However, when the discussion revolves around health insurance, it generally focuses on the type of insurance offered by employers to their employees. This is the kind that covers medical bills, surgery, and hospital expenses and is often referred to as “Comprehensive” or “Major Medical” health insurance.
When the dialogue turns to more general health care coverage, it is more likely that you’ll hear terms such as “Fee-for-Service” or “Managed Care”. Further, you’ll most likely hear about certain kinds of managed care plans. These span the gamut from health maintenance organizations or HMOs to Preferred Provider Organizations or “PPOs”, and Point-of-Service or “POS” plans.
While fee-for-service and managed care plans differ in significant ways, in some ways they are parallel. For example, both cover an assortment of medical, surgical, and hospital expenses, while most offer some coverage for prescription drugs, and some include coverage for dentists and other providers. But there are many important differences that will make one or the other form of coverage the appropriate one for you and possibly your family. Coverage for a group is characteristically offered through many companies, although unions, professional associations, and other organizations also offer it. As an employee benefit, group health insurance has many rewards. Much—although not all—of the cost is frequently absorbed by an employer, as premium overheads are often less due to group purchasing in large groups. In this arena, by enrolling when you first become eligible for coverage, you most likely will not be asked for proof that you are insurable. (Enrollment usually happens when you first take a job, and often during a certain period each year, which is called “Open Enrollment”). Some companies even offer their employees a choice of fee-for-service and managed care plans. Additionally, some group plans also offer dental insurance along with medical.
Health Insurance for the Short-Term. Temporary health insurance is generally a reasonably priced, short term medical plan intended for healthy people who are, in the interim, without health insurance. It can become effective as early as the following day after enrollment, it can be purchased for periods as short as 30 days or up to 180 days, and it’s usually paid for in either one single payment or monthly payments. Temporary health insurance is often utilized by those with specific, short-term needs and generally for individuals who may be:
1. In between jobs or laid off
2. Graduating from college
3. Waiting for Group Coverage
4. Coming off parents’ health plan as a dependent
5. Working part-time or temporarily
6. Waiting for permanent health insurance to begin
Insurance for the Individual is also a smart choice if you work for a small company that does not offer health insurance or if you happen to have your own company and self-employed. The advantage to this insurance is that you can customize your plan to fit required needs from the insurance company that you choose. In this case, you should also be a diligent comparison shopper, as coverage and costs differ greatly between all of the companies out there. While assessing policies, you should consider what is covered, what is paid, and how much you’re required to pay in deductibles and coinsurance.
A thought to ponder. Now that you have a general understanding about the types of insurance available, one idea holds true; be sure that when it comes to health insurance, you always have some. To be caught in an unlucky predicament without it can not only be a hit to your health, but it can be a dire drain to your wallet, as well.
Kurt Stammberger is VP, Marketing at Healthia Inc. Healthia provides integrated comparison-shopping information on group health insurance products and services, doctors and health insurance plans to empower the drive towards Consumer-Driven Health Care.
Kurt Stammberger