There is little doubt that it is important to have health insurance. A report published in November 2007 from the Urban Institute called, "Why Health Insurance is Important," found that people without health insurance receive less medical care and less timely care than those with insurance, and also have worse health outcomes. Further, not having health insurance can put tremendous financial stress on individuals and their families.
Types of Health Insurance
While it's important to have health insurance, it's also important to understand the different types of plans available. Not all types of health insurance are the same. There are two general categories for health insurance plans---private health insurance and government health insurance. The United States Census Bureau defines private health insurance as coverage by a health plan provided through an employer or union or purchased by an individual from a private health insurance company. Government plans are funded by the government at the federal, state or local levels.
Indemnity Plans
A conventional indemnity plans allow you to choose any doctor or hospital for your medical care, and provides reimbursement as expenses are incurred. You will normally be required to pay a deductible for the benefit period before the plan starts providing benefits, and then you'll need to pay co-insurance, or a fixed percentage, of medical services received. Co-insurance is different from a co-payment, which requires you to pay a fixed dollar amount for medical services received. Indemnity plans are often considered the most expensive type of plan.
Managed Care Plans
Managed care plans are often less expensive than indemnity plans, and there are different types including preferred provider organization (PPO) plans, health maintenance organization (HMO) plans, and point-of-service (POS) plans. PPO plans are a type of indemnity plan where coverage is provided to you through a network of selected health care providers.
You can go outside your network for care, but you will incur higher deductibles and higher co-insurance rates. While HMOs provide for comprehensive medical services, these plans are usually the most restrictive when it comes to the selection of your health-care provider. POS plans are a hybrid of the two. You will receive the same type of in-network benefits as you would from an HMO, with reimbursement for out-of-network services similar to a PPO.
Medicare and State Plans
Medicare is a federal health insurance program for people aged 65 and over, and for certain people under the age of 65 with long term disabilities. On the other hand, Medicaid is a program administered at the state level to provide medical assistance to people in financial need. Another program administered at the state-level is CHIP, the Children's Health Insurance Program, which provides health care to low income children whose parents do not qualify for Medicare. Further, some states have their own health plans for people in need. These plans may go by different names in different states. Your state department of health should have information about these programs.
Other Government Plans
Other government plans include military plans, such as TRICARE and CHAMPVA, which stands for Civilian Health and Medical Program of the Department of Veterans Affairs, as well as care provided by the Department of Veterans Affairs, or VA. Additionally, the Indian Health Service (IHS) is a health-care program that provides medical assistance to eligible American Indians at IHS facilities.
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