Benefits of Health Insurance to Individual and Families
Health insurance provides compensation to the insurers when they unexpectedly face health problems and urgently need financial assistance. Health insurance covers most of the medical expenses that are required at the time of hospitalization, follow-up, diagnosis, consultation and different medical exams. Health insurance agencies may be publicly owned privately owned or may be owned by non-profit institutions but all these organizations provide insurance policies for individuals or groups. Health insurance may be a program sponsored by a company to the employees or even an individual may create an health insurance policy for him and his dependents. Many developed countries provide health insurance assistance to the public through their programs sponsored by the government such as United States Mediaid program. The insured should pay some expenses to get the coverage and benefits such as fee, deductibles, premium and some out-of-pocket expenses.
The concept of health insurance was founded by Hugh the Elder Chamberlin in 1694 due to the frequency of accidents that took place. He observed that how people turned physically disabled due to the accidents they came across. Initially health insurance was the claim paid when the accidents took place and coverage for medical treatment was required. Health insurance earlier was known as accident insurance. Some companies such as Franklin Health Assurance Company operated at that time to provide claims to the insured against the rail or road accidents or steamboat accidents. Gradually health insurance companies introduced policies that covered the costs for sick patients, follow-up, diagnosis, and other medical examination. During the 1920’2 many such insurance companies began to operate.
There are many concepts of health insurance that a person should know before creating an insurance policy. Everybody knows that health insurance is a contract between an insured and an insurer. The insurance policies that are created may be for long-term or short-term.
An insured should pay a certain amount of fee to claim in the future which may be monthly, quarterly or yearly to receive the benefits in the future known as ‘premium’. The insured should also pay certain amount form his own pocket up to a certain limit when he attends the clinic, undergoes examination, treatment or diagnosis before receiving the benefits of his policy which is known as ‘deductible’. The amount that should be paid as deductible is decided by the company at the time of signing the contract. The insured should also pay a certain amount every time he follows to clinic which is known as ‘co payment’ before receiving the insurance benefits. In order to treat the dependents of the insured the insured pays to the insurer a certain fee known as ‘capitation’. Some companies provide a document to the hospitals that they shall pay a certain amount as compensation to the insured and hence the hospitals should treat the patient considering the payment made from the insurance company which is known as ‘prior authorization ‘.
Insurance plans may be comprehensive or scheduled. Comprehensive plans are fixed proportion of fees that are paid to the hospitals after the patient pays the deductibles. The comprehensive plans are paid in lump sum amount. The scheduled plans are the plans that are paid by the insurance companies to the insured for meeting the routine expenses related to hospital care such as money for prescription etc.
Mainly there are two types of health insurance. One of them is Fee for service and the other one is Managed care. The two policies are different from each other and also similar from each other. Under ‘Service for Fee’ plan, the patient visits the doctor for check-up or other routine follow-up and files the fees to be paid to the clinic. The medical service organization may also file the fees that are to be paid for providing service to the patient. Under Managed Health care there are mainly three types of plans HMO, PPO, POS. Many schemes are available for the three type of plans. These plans may be comprehensive or scheduled.
Under HMO plan the insured has a wide choice to choose his own physician or a medical organization. In most of the HMO plans the insured should pay a certain amount of fee before availing service from the medical professional per visit known as ‘co payment’. Most of the expenses are incurred by the patient before receiving the coverage and the patient should pay for lab tests also. Under the PPO plan the doctor is not preplanned, the patient signs a contract with the hospitals and the hospitals charge less fee from the insurance providers. Certain points should be considered before choosing for PPO network such as the doctors who are covered under PPO, hospitals which have introduced PPO plan, etc. Under the POS plan the doctor is chosen from a network of service providers who are covered under POS plan. Your doctor is referred by the insurance company and you should avail services from their company only.