First of all, what is health insurance? Health insurance is a kind of policy that was created to help secure health-related issues without causing the individual to spend unnecessary amounts of money in cases where health care attention is needed.
Although not often seen as a major cover, most especially in developing countries, health insurance is among the most important aspects of insurance one must secure, as it becomes a life saver when you need healthcare.
Health insurance has no disadvantage, but it has advantages and benefits that come with it. As an entrepreneur, business owner, office worker, or media person, you should consider having a health insurance cover that will always protect the interest of your health at all times.
What are the different types of health insurance?
There are several types of health insurance available, and you can choose from one of them or the one that best suits your needs or your family.
1. Traditional Health Insurance Plan
The traditional health insurance plan is a type of health insurance plan that has been there and has been practised for a long time. This type of health insurance operates in a way that the client will have to pay some money up front in the form of a deductible, then the insurance company will cover all your medical expenses whenever you need medical attention.
In this case, you pay upfront, and then you wait for the company to operate the majority pertaining to your health. It is always advised that you increase your deductible at all times.
Whenever you have extra funds on you, invest some into the traditional cover so that whenever you need medical care, the company will not hesitate to give you the needed care.
2. Fee-for-service or indemnity health insurance plan
This type of health insurance plan gives you the whole control over almost everything, like choosing your personal doctor, hospitals and/or other health care providers. You are responsible for both deductible and co-insurance amounts.
Fee for service gives you total control over everything existing within the policy without any compromise or anything else restricting you from doing otherwise.
In a fee-for-service health insurance plan, you first pay the money for your cover out of your own pocket and then later file for a claim.
It can be compared to a traditional health plan because what you do is to pay upfront, which gives you more advantage. You also do not need permission to refer yourself to any specialist because the insurance company will not interfere in the doctor’s visit or attention from you. You still have a free role to operate in fees for service because you can consult a doctor at any time, fix a doctor's visit, etc.
One downside of fee for service is the amount of money you are expected to pay, and this means increased deductibles and may cost you from around $200 to about $2000 before your insurance company will begin their service. But the moment you pay that money, they’ll start paying for your medical bills, which can amount to about 70 to 80%.
Compared to traditional health insurance plans, you’ll also need to pay upfront before they’ll start implementing your cover. Fee for service can be a little bit expensive compared to a traditional plan.
Despite the free role given to you, you should consider choosing doctors that charge a lesser amount of money, because if the doctor you choose charges even more than what you pay as your cover, you’ll need to make that up yourself without their help.
Some doctors are considered higher class, so such doctors charge you more than others due to their standard. But for someone who cannot afford such, you should look out for other doctors within the company network of doctors. Also, before you invite a doctor, ensure you know how much they will charge, and this is because you may end up paying more than you expected.
Also, you should not expect regular checkups from doctors because it is only a fee paid for service. If you need a regular medical checkup, meet with your company and negotiate on how that can be done.
3. Health maintenance organisation (HMO) Health insurance plan
A health maintenance organisation is a type of health insurance policy available which is the least expensive but least flexible health insurance policy. It is among the cheapest health insurance covers you can get.
It covers mainly groups of people that are more referred to as members or employees. In a health maintenance organisation, the members or employees have less control over their choice of physicians or hospitals, unlike in fee-for-service, where you have complete control over the choice of doctors, hospitals or physicians.
A health maintenance organisation requires that all members or employees should choose a primary care physician (PCP). However, if you need any medical attention, you’ll need to have PERMISSION FROM THE PCP.
Health Maintenance Organisation cover does not give you total freedom to choose from their network of doctors unless you are on their primary care physician. You also do not have the full right to contact doctors directly, unless you obtain it from the primary care physician.
It seems like a hurdle for a person who requires emergency care because if you do not contact them for permission, you may not be able to access their hospitals, which is one of the downsides of Health Maintenance Organisation.
HMO policyholders pay the least premium or sometimes zero premium, but when in need of specialists or doctors, they’ll need to obtain permission from the PCP.
Whenever you need attention and your request has been granted, you can only walk into HMO-approved hospitals to receive your medical care, or you can still opt to pay all the cost from your own pocket.
Always have this at the back of your mind: in the Health Maintenance Organization, whenever you are out of the HMO network area, you cannot receive medical attention until you visit an HMO-approved hospital.
4. Managed care health insurance plan
Managed health care insurance is often found in private health insurance plans. It is simply a type cover that provides care to a person. It works in a way that the insurance company works hand in hand with some healthcare providers to provide care to the client under the cover.
Managed care has benefits, so if you are in managed care with a company, the company may likely pay you incentives if you seek care from their selected healthcare providers. They give incentives to clients that always patronise their own medical facilities. It is another flexible type of health insurance cover you can choose.
5. Preferred Provider Organisations (PPOs)
Preferred provider organisation health insurance plans provide low health insurance plans for clients with a network of health care providers. In PPO, the insurance company encourages their clients to use the same doctors and hospitals whenever they require medical attention.
What the insurance company does is to negotiate with this network of healthcare providers to provide cheap or discounted healthcare to their clients.
In PPO, clients are allowed to see any doctor or visit any hospital of their choice within the network of healthcare providers selected by the insurance company. The insurance company also gives financial incentives to clients in order to keep them in the network.
It is required that you pay a deductible annually before the insurance company begins your cover. Unlike HMO, PPO gives you the freedom to choose from any doctor or hospital within the network of provider healthcare providers. The more you remain with PPO, the less money you spend on your health insurance cover.
PPO is another cheap health insurance cover that is usually not considered. But you tend to benefit more if you choose PPO as your type of cover. Always consider choosing a plan that gives you freedom to choose doctors and hospitals. However, if you choose to seek medical attention elsewhere outside the network, you’ll have to pay the bills from your own pocket.
Looking at how cheap it is, you never risk your penny outside this plan. It is cheap, flexible and more convenient for anybody out there. If you have a family, consider choosing PPO as your own type of cover because of its benefits.
6. Point of service health insurance plan
Point of service is a combination of HMO and PPO to provide health care. In this case you’ll require a primary care physician before you receive medical attention. You can seek medical care elsewhere and still get your cover.
But you are not totally free to refer to yourself unless you are prepared to spend more from your pocket, and if by any chance the company refers you to any doctor outside the network of healthcare providers, they’ll pay most of the medical bill.
Here, you have no fear if you are referred outside the network of doctors, because they’ll pay most of the bill from your cover, and you’ll pay the remaining from your deductible.
Clients who make use of services covered by the primary care physician (PCP) receive a higher level of coverage from the insurance company. Point of service health insurance plans also feature care services, workshops on nutrition, smoking, etc.
7. Exclusive Provider Organisation Health Insurance Plans
In an exclusive provider organisation, members are not allowed to use other networks except for those in the list of network healthcare providers; however, in emergency cases, members are free to go elsewhere for attention.
All EPO members must possess a primary care physician who will refer them to the network of specialists within the healthcare provider network.
8. Qualified small employer health reimbursement arrangements for health insurance plans
This type of health insurance plan is centred on small businesses with fewer employees. The small business gives tax-free money to its employees, who in turn pay for their services.
9. Health savings account health insurance plan
It is a kind of policy in which employees create a tax-favoured account which is used alongside a high-deductible health policy to pay for their medical expenses.
The benefits of these health insurance plans
Choosing from any of the above-mentioned types of health insurance plans gives you an edge and more added advantage on the type of cover to choose from. Some provide very cheap options, which means you have no excuse for not getting yourself, friends and family members covered.
Most of the health insurance companies are prepared to offer you discounts; some also give incentives too.
How to determine the best health insurance plan
*Check if you can afford it: Before choosing a cover, see if it is affordable. Most people make the mistake of choosing a cover they cannot afford after some time. So, how much it costs to get a cover is also a factor to check out for. Expensive plans have several benefits.
*See if the cheaper means is best for your standard of living: the cheaper the cover, the fewer features it has. When you go for an extra cheap cover, you lose out on so many benefits, and it may turn out that while you are relying on a cheap plan, you are even spending more for healthcare outside.
*Independence: Some health insurance covers give you the freedom to do whatever you like, while others have restrictions. In some cover, you are free to choose from the network of doctors and hospitals, while others require you to obtain permission before you get attention.
*Deductible: Deductible is a very important aspect of your cover that you should never joke with. The deductible is the money you set aside as a rescue fund for your health insurance cover. Every health insurance cover has a deductible included in it.
Words of advice
There are several types of health insurance cover available; some are cheap, while others are a little bit expensive due to the incentives they offer. However, before you decide on getting a cover, please go through all the types of health insurance cover available, see their benefits, high side, and low side, and then choose from one of them.
Wrapping up
Health insurance cover is an important aspect in the life of humans, and you should do all it takes to create a cover for yourself. If you cannot afford expensive types of cover, consider choosing the cheaper ones available.