Merritt Personal Lines Manual: Chapter 2 The Mechanics of Health Coverage
The commonly-used term "health coverage" refers to a group of insurance policies and government programs which pay for a range of costs from doctors and hospitals to more specific needs, such as long -- term care expenses or disability insurance (which replaces lost income if you can't work because of an illness or accident).
Health insurance doesn't just cover medical expenses. It provides payment of benefits for the loss of income and/or the medical expenses arising from illness or injury. So, health insurance is sometimes called other things, like accident and sickness insurance or accident and health insurance.
Health insurance is generally available on an individual or group basis. Group Insurance accounts for more than 90 percent of the health insurance sold. Premiums tend to be lower for group coverage and this is how most people get their health insurance.
When it comes to group health plans, you often have a choice among a few options: Do you want to join a health maintenance organization (HMO), a preferred provider organization (PPO)? Or do you want to pay more and get a reimbursement -- style policy (Medical Expense plan) so that the insurance pays you back for a percentage of your costs, after you meet the deductible?
An HMO is a form of managed care and consists of a network of doctors and hospitals that provide comprehensive health care services to their members for a fixed periodic payment, usually monthly. As a result, the HMO is both the insurance company and the health care provider. A PPO is a slight variation of the managed care structure in which independent doctors and hospitals agree to accept PPO payments in exchange for charging pre -- set amounts for goods and services. Because price is an important factor, about one in three Americans is enrolled in some form of managed care today.
The other Americans are covered by a more traditional reimbursement plan, Medicare or they have no health insurance at all.
If you're searching for your own coverage, there is a tremendous variety of policies available in today's health insurance market. Some contain a single coverage (for example, hospitalization coverage only) or a combination of the major types of health insurance. Even if you're just choosing among the two or three plans offered by your insurance company or your employer, here we cover what you need to know to choose the plan that's right for you and your family.
