What health insurance is best for you? The answer to that question depends on your understanding of what health insurance is and what your particular needs are. First, it is not discounted health care. Generally speaking, insurance is a kind of risk management. Your premium is your monthly payment to the company to assume the risk of expense. In one sense, this is a sort of gambling. In this case, the health insurer is betting that you will not need care, and the premium you pay every month is your hedge to offset the consequences should you face large medical expenses. Your health insurance benefits are what you get when the company “loses” and has to pay out.
Now that we know that a health insurance policy is a way to manage risk, it is important to understand that there are a number different kinds of agreements, or policies, available depending on your needs. Generally, the subject of health insurance brings to mind questions about doctor and hospital care available for individuals and families through privately purchased policies, and/or employees through an employer group health insurance plan. When choosing a health insurance policy, you (or an employer) must decide what your tolerance for risk is and how much risk you want managed. To that end, there are many private companies selling insurance plans.
Some examples of household names that you are sure to recognize are Aetna, Blue Cross Blue shield, Humana, United Healthcare, Sterling, and Mutual of Omaha. Insurance companies are also known as “payers” because they are responsible for paying out on your insurance claims when need arises. Though there may be a relatively small number of companies with instant name recognition, there are literally hundreds upon hundreds of health insurers, and these are all separate payers offering different policies with different selections of benefits catering to different kinds of insurance needs. There are so many because health insurance is largely managed by private insurance companies regulated by Federal and State laws.
Whereas private insurance includes numerous different payers, a single payer health insurance program usually describes a system in which the government manages all health care costs. The government program is the single payer. In the purest form of this, there would be no interaction at all with the private sector. The closest example of single payer health insurance in the U.S. is probably Medicare, the Federal health insurance program for individuals age 65 and older. When Medicare first became law in 1965, the Federal government was the single managing entity and payer. In more recent years, the Federal government has allowed private insurance companies to manage Medicare benefits through private managed care plans in the form of Medicare HMOs (health maintenance organizations), PPOs (preferred provider organizations), and PFFS plans (private fee for service plans). The private Medicare plans are called Advantage Plans, and even though the government still supervises and authorizes the plan, it has allowed other payers to participate in the Medicare program.
How do you choose what is best for you? If you are approaching age 65, Medicare will very likely figure into your insurance plans. Everyone else must sift through the many different insurers and plans on the market. The vast number of choices and policies can be overwhelming. Kinds of health insurance include dismemberment insurance, continuation of coverage insurance, hospital inpatient only policies, catastrophic coverage, long term care, temporary health plans, policies that are specific to a particular disease, health savings accounts, point of service options, supplemental health insurance, and the many different kinds of managed care plans.
How you choose a health insurance policy depends on your assessment of your costs, needs, and circumstances. If you need doctor and hospital coverage for specific period of time, then you might seek a temporary policy from Blue Cross or Humana, for example. If you need family health coverage, then you might, hypothetically, seek a comprehensive medical plan from Wellmark, Aetna, or John Deere. Some people take out a policy, to provide another example, from United Healthcare (or some other insurer) to pay only in the event of hospitalization as result of cancer. Other people, who work in a high risk environment, might take out a policy to pay in the event of dismemberment occurring under certain, specified circumstances. The policies can be quite specific and written to answer your specific needs.
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