InsuranceLecturer — Health Insurance is the coverage provided by a private insurance company or a government agency in order to aid the insured person to meet their medical expenses.
It is basically a contract between the insurance company and the insured person that runs for a specific period of time or spans the entire life span of the insured person.
In the case of a time bound health insurance plans, the insured person has to renew the insurance plan at the end of the policy period in order to continue enjoying the coverage benefits provided by the plan.
There are basically two forms of insurance policies available in the form of comprehensive insurance and scheduled insurance plans for the consumer to choose from.
Comprehensive Health Coverage
Comprehensive health plans provide a complete range of coverage including taking care of the physician charges and hospitalization charges. This plan pays for a specific percentage of the cost of the hospitalization charges and the physician charges.
The remaining percentage in the hospitalization charges is usually paid by the insured person in the form of a deductible, which is nothing but a lump sum amount paid at the beginning of the policy term.
Comprehensive health insurance policies are considered to be expensive because of the huge payouts made by this plan. The payouts are usually in the range of $1,000,000 to $5,000,000.
Scheduled Health Coverage
This type of policy is a basic health policy that provides coverage to meet the day to day health care needs of the insured person including paying for regular outpatient visits to the general practitioner and getting prescription drugs.
The scheduled health plans are also called as association plans or the mini med plans. These plans are called association plans as the association that provides these types of plans should not be dependent entirely on selling insurance policies for running their business.
In addition to providing health insurance services, these associations would also be involved in other line of business. One such American Association is the Health Care Credit Union Association (HCCUA).
The premiums paid for scheduled health plans are much lower than the premium paid for comprehensive health plans. The premium is quite low as the pay out in a given year is limited to the range of $1,000 to $20,000.
The association makes the payment directly to the health care service provider according to the “Schedule of Benefits” given in the plan. Some of the costs that are covered by this scheduled health plan include the hospitalization and surgical costs. Both these types of insurance plans are provided under private health Coverage plans.
Private Health Coverage Plans
Private Health Insurance can actually be purchased as a group, which is the case of employer-sponsored programs or can be purchased as an individual.
As per the United States Census Bureau, 70% of the private coverage plans comes under the employer sponsored programs while only 10% purchase health insurance plans directly as an individual. Some of the types of private health insurance coverage plans are described below.
Employer Sponsored programs
Under this category, there are different programs being run including
- Small Employer Group Coverage
- College-Sponsored Health Insurance for student
- Federal Employees Health Benefits Program and
- Portability of group coverage
Association Group Health Insurance
This insurance coverage is provided by associations such as the American Bar Association to their members.
Individually purchased Plans
In this type of plan, the individual has to pay 100% of the premium as they do not have the employer to make the contribution. Most of the self employed individuals purchase health insurance through this route. They also get tax deduction for the premium paid in maintaining the policy.