One of the growing problems in America's health care system is access to health insurance.
It is estimated that 30 million Americans are uninsured. This
problem is particularly acute for individuals who suffer from illnesses
or disabilities and do not qualify for qovernmental insurance
such as Medicare and Medicaid. Since sick people are likely to
use more health care services, they are more expensive to insure.
insurance
companies may refuse to insure them because they are "bad risks," or
may charge them more in premiums. Ironically, those who need
health insurance the most often have the hardest time finding it. It is important to know what types of health insurance
are offered, and what the strengths and weaknesses are of each.
Following is a discussion of the current major types of private health insurance available.A. Employment-Based Group insurance
The most common way of accessing health insurance is through employment. Many employers offer group health insurance benefits to their employees. These benefits are usually available to spouses and children of employees. Some employers pay the entire premium for their employees' coverage; others require a contribution from the employees' paychecks. In general based insurance is the most affordable type of coverage.
If a sick or disabled person is well enough to work, or if the spouse of an ill person can work, employee health benefits can help insure the cost of medical care. However, such plans often limit the coverage they offer. Some group plans may refuse to insure a sick person to prevent an increase in premiums owed by the group. Other employer plans may impose pre-existing condition exclusions. That is, they will not pay for the medical care of an illness which was diagnosed or treated prior to employment. Other plans impose waiting periods during which an employee pays premiums but is not insured. In addition, group plans rarely pay the entire cost of medical care. A standard "major medical" indemnity plan pays 80% of medical care costs after an annual deductible paid by the insured person.
An increasingly popular model of employment-based health care is the HMO model. HMO's, or health maintenance organizations, offer comprehensive health care in return for a monthly fee. In additoin, there is usually a copayment made by the insured at the time he or she used a service. HMO's offer the advantage of "one-stop shoppong" for a person's health care needs.
HMO's try to contain the cost of health insurance by "managing" an individual's care. Usually medical care services must be approved by the insured person's primary care doctor within the HMO. Most people welcome the oversight provided by a doctor who is well acquainted with the state of their health. However, on occasion this has led to complaints that HMO's arereluctant to approve necessary care. Also, the plan will usually not pay for services provided by doctors and hospitals who are not in the HMO. Such "out-of-plan" services must usually be approved in advance by the HMO. If a sick or disabled person wants to get specialized treatment from a hospital or doctor outside of the HMO, his or her insurance may not pay for it.
A third type of group insurance plan is the PPO, or "preferred provider plan." PPO's allow an individual to obtain medical care from an approved list of providers at little or no cost beyond premium payments. If, however, the insured person goes to a provider not on the PPO's list, he or she must pay a higher percentage of the cost of care. Thus, there is a financial incentive to PPO list.
The success of a PPO depends on the number and variety of providers on its list. An individual should ask to see the names, addresses and specialties of all PPO providers prior to enrollment. If there are enough providers in the person's geographic area who can treat his or her medical problems, a PPO may be a wise choice.
B. Non-Group Health insurance
Another source of health insurance for sick or disabled individuals is generally referred to as "non-group." This type of health insurance is offered on an individual basis rather than to a group. Like most indemnity plans, it usually pays a percentage of the cost of care after a deductible amount. Because the cost of administering many individual policies is high, non-group insurance is often expensive.
