Private Healthcare Insurance

By: EconomyWatch Content   Date: 24 February 2010

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Health insurance can be obtained through three ways in the US. These options are:

  • A government sponsored health plan
  • Employer sponsored health plan
  • Private health insurance plans offered by insurance companies

 

As of 2007, 202 million Americans were covered by private health insurance. Private health insurance is ideal when you have started a business, employed with a small business or are looking for a job. While choosing a private health insurance plan, you must scrutinize the various options available. For instance, you can opt to include a prescription drug option, dental and vision options in your plan. The number and type of options you choose will influence the amount you need to pay as premium.

Private Healthcare Insurance: Cost

Private health insurance is typically offered by profit oriented organizations. Some non-profit organizations, not run by the federal or state government, also provide private health insurance. This type of insurance tends to be quite expensive. The premiums involved in such insurance plans are also higher than that paid or deducted for government health insurance and employer health insurance plans. This is because the age and current health of the insured are the main basis of cost calculation in private health insurance plans.

 

Private Healthcare Insurance: Types

In the US, private health programs can be divided into the following broad categories:

 

Managed Health Care: These insurance plans include three options: HMO (Health Maintenance Organization), PPO (Preferred Provider Organization) and POS (Point of Service). The plans differ in their general features but work on the principle of enabling the insured to use the medical services of a network of contracted doctors by paying a small amount in the form of co-pay.

 

Indemnity Health Plans: These plans are the oldest and most expensive medical insurance plans. The insured enjoyed maximum flexibility in terms of leverage to choose a specialist physician and primary care physician, irrespective of location. The insured can choose from three reimbursement options offered under these plans according to his budget and requirements. However, in some medical procedures, you might be required to pay in cash before the insurer reimburses you.


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