Types Of Health Insurance

Health insurance is a relatively new entrant in the field of insurance and was first offered by the Blue Cross in the year 1930 when it started offering pre-paid hospitalization. Prior to this, people attached greater importance to insurance that would cover the loss of salary or wages due to some form of illness. Moreover, the hospital costs at that time were much more affordable in comparison to today's medical costs that are sure to make you break your bank account if you do not have a health insurance. Now that most of us are aware of the importance and benefits of having a health insurance, it is important to find a relevant policy for our needs that offers us maximum coverage against the risk of financial losses due to unforeseen medical expenses.

Whether you are looking for an individual health insurance or a family health plan, you can select the same from among different types of health insurance policies available in the market. These can be classified into four basic types that are given below.

Major Medical Health Insurance: In this type of health insurance, the insured is required to pay a deductible before he or she can avail off insurance-pays benefits. If you opt for this health insurance, the insurance company is liable to pay 80% of the medical bills, while you will have to bear the burden of only 20% of the entire billing amount. In addition to this, the insured has the facility to go to a doctor or hospital of his or her choice and the insurance company pays 80% of the bills directly to the health provider. This type of health insurance policy is also referred to as the traditional medical insurance.

Health Maintenance Organization or HMO: This type of health insurance plan is less expensive than the traditional medical policy and focuses on the long term care of its insured. In this plan, each patient is taken care of by a Primary Care Physician. The main responsibility of the physician is to provide preventive care and even coordinate with other specialists in case additional care is required for the well being of the patient. If you opt for this health plan, you can only select a doctor or a hospital that falls within the network of the insurance company. This type of health insurance is also termed a "managed health care."

Preferred Provider Organization or PPO: This plan works on similar lines as an HMO in terms of the choice of network physicians that it offers. However, the insured is not restricted to choose from within the same. Nonetheless, it is more beneficial to go with network doctors as the medical bill is likely to be much less.

Point of Service or POS: This health insurance plan combines the integral features of PPO and an HMO by necessitating a Primary Physician for the insured who can later be referred to an out of network specialist by the former. In case the insured chooses to see a specialist without referral, the insurance company reserves the right to refuse reimbursement of the medical bills.