Understanding Health Insurance – Types of Health Insurance
Understanding Health Insurance
Private health insurance is often offered through employers or other organizations. Some employers offer only one type of health insurance plan. Others may allow you to choose from more than one plan.
Buying health insurance on your own, instead of getting a plan through an employer, usually costs more. You pay for the plan yourself, rather than sharing the cost with an employer.
Some insurance plans work with certain health care providers and facilities, which are part of the plan’s network, to provide care at lower costs. This is called managed care. There are different kinds of managed care plans:
- Health maintenance organizations (HMOs). These plans usually pay only for medical care within their network of health care providers. HMOs generally cost less than plans that offer a greater choice of providers.
- Preferred provider organizations (PPOs). These plans cover more of your medical costs if you get care within the network of care providers. But they still pay some costs for care outside of the network.
- Point of service. You can choose between an HMO or a PPO each time you get medical care. These plans offer more flexibility in choosing doctors and hospitals.
Indemnity (fee-for-service) plans are different from managed care plans. The choice of doctors or hospitals you can use for your care is not restricted. Your health care provider is paid a fee each time you get medical care covered by the plan. The costs you have to pay on your own (out-of-pocket) could be higher than they are with some managed care plans.
Public (government) insurance
Medicaid is a state-run, government insurance program that helps some people with lower incomes pay for medical care. Medicaid pays your health care provider. You may have to pay a small amount for certain medical care.
Medicaid is available only to certain low-income people and families who are eligible. Rules about who is eligible and what services are covered vary from state to state. To learn more about Medicaid, go to www.cms.gov.
Medicare is health insurance provided by the government for people age 65 or older. People who have certain disabilities or health problems, such as long-term (chronic) kidney failure treated with dialysis or a transplant, also may get insurance through Medicare. It covers some, but not all, medical costs for people who qualify.
Medicare has four parts:
- Part A (hospital insurance) helps cover care in certain medical facilities, such as hospitals or nursing facilities.
- Part B (medical insurance) helps pay for doctors and certain outpatient care. It covers some services not covered by part A, like some home health care and some physical therapy.
- Part C (Medicare Advantage Plan) allows you to get health care coverage for parts A and B (and usually part D) through a private health plan, like an HMO or a PPO.
- Part D helps to cover some prescription medicine costs. People with limited incomes may qualify for extra help with prescription drug costs.