Categories of Medical Insurance -1
A Insurance Article Contributed by Deepak Cutting
Categories of Medical Insurance -1
Medical or health Insurance seeks to offer a solution to the sometimes devastating and unexpected expenses involved in medical treatment. Finding the right plan to suit your needs, financial capacity and avoid common mistakes, requires careful evaluation of the various options.
Medical Insurance Types
Health care coverage generally means plans offered by insurance companies and health maintenance organizations. These plans offer to pay for most (if not all) medical treatment costs, in return for a fixed periodical payment or premium. The service offered can be categorized into either 'free for service' or 'managed care'.
Sometimes such insurance is obtained by virtue of being a part of a group (of employees, professional or other organizations etc.), in which case the insurance cover is called 'group insurance'. The type of insurance obtained determines the amount to be paid for the service and the kind of service available.
'free for Service' or 'managed Care' Medical Insurance
The 'free for service' plan is usually sold by the traditional medical insurance companies. Under this cover, the insured person can seek treatment from any Doctor of his/her choice and does not need any "reference" to see a specialist. Such a plan pays for most, but not all, medical treatment. The type of treatment paid for by such a policy is those identified in the policy and/or deemed a 'medical necessity'.
Often the medical service provider is known to the insurance company and will charge the insurance company directly for the service rendered. In some cases the beneficiary is expected to pay the service provider and claim reimbursement from the insurance company.
Payments under the 'free for Service' Medical Insurance
* Premium: This is the fee payable, depending on the extent of coverage provided, whether you have obtained the cover as a part of a 'group' etc. Some times the employers provide health insurance and may or may not deduct the premium from your dues.
* Deductibles: This is the amount that the insured person must pay on his own. Any payment in access of the deductible amount is to be borne by the insurance company. Deductibles reduce your premium but do not totally meet your medical expenses.
* Co-insurance: Some health insurance plans expect the insured person to pay a certain percentage of the medical costs. This cost sharing is called co-insurance, and varies according to the plan offered and brings down the insurance premium accordingly.
* Ceiling: Most free to service plans have an upper limit to the amount reimbursable, depending on the type of illness for which reimbursement is claimed and the maximum amount that can be reimbursed under that policy during the lifetime of the insured person.
Payments under the 'managed Care' Medical Insurance
With 'managed care' plans, the insured person pays the premium and the deductibles.
Managed care health insurance plans use a network of specified Doctors and Hospitals, clinics etc., to dispense health-care to their members. While some insurance plans will require routine care to be obtained from the nominated agency only, other plans provide incentives if specified service providers are used. The insurance premium in case of 'managed care' plans is usually lower. If the 'managed' plan has prescription drugs, it may specify the drugs that the plan will cover.
It will not pay for medical attention not considered necessary. The plan may require 'preventive care' to avoid serious medical conditions.
