Choosing Between the Different Types of Health Insurance Policies |
You know you have to deal with it. There is no way around it. Like it or not: you have to protect yourself and your family when it comes to matters of health. Especially if you are self-employed or own a small business.
In order to do so, you have to understand the basics of health insurance policies. So, here’s the question. Do you know how to choose between the different types of health insurance policies?
In case the answer is no, no need to be embarrased. You are not alone. Besides, we are here to help you with a quick guide that will explain the basics. Actually, here are three basic types of health insurance policies. These are:
- Consumer directed policies
- Traditional policies
- Managed care policies
Each type of policy covers very different services. Some cover medical, dental, vision, and mental health services. Others only cover emergency medical care. Your task is to research each type carefully before making a purchase.
Consumer Directed Policies
Consumer directed health insurance policies have the benefits for covered medical expenses paid directly to the insured. The insured can then use this money to pay the doctor or pay for other, non-medical expenses that are related to the injury or illness.
Traditional Policies
Traditional health insurance policies (also known as or fee for service policies) are set up so that. after a small premium is paid, each service you as the insured receives is paid for by the patient at a discounted rate. It’s a co-pay system. Depending on your level of coverage, your co-pay will be higher or lower and the co-pay is required on all medical services. It can be a routine office visit or an intensive hospital stay. These health insurance policies tend to be cheaper but the cost might be higher in the long run.
Managed Care Policies
This is complicated as managed care health insurance policies come in three flavors: HMOs, PPOs, and POSs. Each provides a different type of coverage. Yes, more research for you. Managed care health insurance policies let you choose the provider (except in the case of HMOs). In managed health care, you can get discounted services when doctor who is signed up to that particular service is chosen.
These tend to be comprehensive policies (except in the case of HMOs) that cover everything from emergency medical services to vision and dental care. Usually there is deductible involved and the insurance company pays everything above the deductible.
Whichever of the different health insurance policies you choose, make sure you know what your coverage will be before you make your final decision.
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