With the recent ruling on the Health Care Penalty Tax by the SCOTUS, and health care in upheaval, it is crucial that we understand what is at stake for us as average, every day Americans. To begin, we need to understand the basics of the plans that are available to us today.
Now, more than ever, health insurance is being viewed as a necessity, providing your family with much needed peace of mind should anything medically serious happen. Generally, good health insurance covers medication, office visits, surgeries and hospital stays. Some health insurance coverage may also include diagnostic and treatment procedures. All health insurance plans cover preventative measures such as shots and wellness check-ups.
There are several basic health insurance coverage plans to consider. In a managed care plan the insurance company offers its own doctors and hospital affiliations. The disadvantage of managed care health insurance coverage is that you’re often required to pay an additional fee should you prefer to visit your own doctor or be admitted to the hospital of your choice.
A fee-of-service plan is a health insurance coverage plan in which the company splits the cost of the doctors and hospital bills with the insured. The insured pays the insurance company a monthly premium, while the insurance company pays a portion of doctor and hospital expenses. Fee-of-service plans provide either basic coverage or major medical coverage. A basic fee-of-service plan covers the hospital room and hospital care and some additional hospital services like x-rays and medications. Basic coverage also includes costs for surgery and some doctor visits. A major medical fee-of-service plan is designed to cover the cost of long term care and major illness.
Next is the Health Maintenance Organization (HMO) plan. Services, such as doctor’s visits, hospital stays, surgery, diagnostic tests, etc., are fulfilled by providers under contract with the HMO. The insured, therefore, generally does not have the freedom to choose his or her own doctors or hospital. Typically, the insured is assigned to a primary care provider and must go through this provider in order to be referred to other doctors or specialists (who are also contracted with the HMO in most cases) when necessary.
Medicare is a national health insurance program for people 65 years of age and older, certain younger disabled people, and people with permanent kidney failure. Medicare is divided into two parts:
Part A - Hospital Insurance
Part A helps pay for care in a hospital and a skilled nursing facility, and for home health and hospice care. It does not cost the participant anything when they fit into certain categories such as a permanently disabled person, a US citizen or permanent resident age 65 or older.
Part B - Medical Insurance
Part B helps pay doctor bills, outpatient hospital care and other medical services not covered by Part A. Everyone who enrolls in Medicare Part B must pay a premium.
As Medicare expands, more services become available. There are now Medicare parts C and D, each of them providing different coverages. With more coverage comes more premiums.
COBRA isn’t a health insurance plan, but a government effort to protect people from losing their health benefits in certain situations. Passed in 1986, the Consolidated Omnibus Budget Reconciliation Act (COBRA) requires most group health plans to provide a temporary continuation of group health coverage that might otherwise be terminated. Situations that are covered by COBRA may include death of the insured employee, less hours or pay (for reasons other than gross misconduct), separation or divorce, Medicare entitlement, and a dependant reaching the age of 26. COBRA generally applies to all group health plans maintained by employers (with at least 20 employees) or by state and local governments. The law does not apply to plans sponsored by the Federal government, by churches or certain church-related organizations.
Last, but not least is Supplemental Insurance. These plans are not considered coverage like major medical plans. They are usually indemnity plans, which compensate the insured when they experience a loss due to medical treatment. Policies might include coverage for hospitalization, accidents, dreaded diseases, and more. Sometimes referred to as gap insurance, these policies normally pay the insured, not the doctor or hospital, for services they received. There are a wide variety of health insurance coverage plans available to most people.
With a little research, working with either your employer or insurance agent, you can find the perfect plan for you and your family.
