Health Insurance Guide

When planning your financial position, it is extremely essential to factor in insurance. Even though that fact is known to most of us, millions of individuals and families continue to be without health insurance. While most low income families and individuals do not have health insurance because they cannot afford it, there are even more that do not have it because of ignorance. There are many that do not know that there are different types of insurance.

Traditional Insurance coverage
The basic type of health insurance is called the traditional health insurance. This one works much like car insurance. There is an initial payment and then the monthly premiums which are deducted from the person?s checking or savings account. Some insurance companies also bill the customer monthly by sending a paper bill. Most people prefer to have it deducted directly from their account in the form of a bank draft. This preempts the possibility of the policy lapsing if the policy holder forgets. Traditional health insurance has been the norm for insurance for many years.

In a traditional health insurance policy agreement, the individual deals directly with the insurance companies or broker. The insured also negotiates all terms with the company.

Managed Care Insurance
Managed care insurance has been around since the early 19th century but not until the last 20 years has it really picked up and gone mainstream. Managed care involved a network of doctors, hospitals and other health care providers working in tandem with insurance companies to form a network that provides health care at reduced costs to their members. The most common example of this is group health insurance which is provided by employers to their employees when they get hired or when they become eligible for insurance.

PPO
PPO stands for Preferred Provider Organization and this refers to a network of insurance companies working in league with health care providers to provide medical services at discounted rates to their members. When the insured joins the network, usually through an employer who is participating in the network, he or she is fills out a form usually online. In the application, the insured is asked to pick out a doctor from among many who participate in the network. Usually, the patient picks out a doctor who is in the area where they live. The insured then received an insurance card in the mail which has their name, their group number, the 800 number of the network and the name of the doctor usually known as the PCP (primary care provider). An example of a PPO network is CIGNA.

HMO
This stands for Health Maintenance Organizations. These are very similar to PPOs but offer their services at a cheaper rate than PPOs. The insured also goes through the process of picking the doctor and receiving an insurance card over the mail. Just like in a PPO, when the insured goes to a doctor, he or she pays a co-pay, usually between $10-35 and the insurance company picks up the rest of the cost.