Advantages and Disadvantages of Private Insurance
In the United States, individuals have three ways to obtain health insurance: through a government sponsored health plan, through their employer or by purchasing their own plan from an insurance company. Having your own individual plan instead of a being part of a public or an employee benefit plan has its benefits as well as its drawbacks. Analyzing this information can help you make the right decisions when deciding to control your own health plan.
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The Facts
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Private insurance is provided through an entity for profit or non-profit and other than the federal or state government. More people are insured with private insurance in the United States than the other two insurance options. In 2007, 67.5 percent of people were covered by a private health plan, a drop from 67.9 percent in 2006. However the decrease in percentage didn't affect the overall total as the 202 million Americans who had private health insurance in 2007 was virtually unchanged from 2006.
Types
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In the United States the two main private health programs are: managed health care and indemnity health plans. Managed health care plans consist of three options: HMO (Health Maintenance Organization), PPO (Preferred Provider Organization) and POS (Point of Service). These plans have different characteristics, however the fundamental principle is to keep the health costs low by using a network of contracted doctors in their geographical area who provide medical services at a discounted rate. Indemnity health plans are the oldest types of medical plans. They provide the insured maximum flexibility by allowing them to choose who they want to see for medical care regardless of location. This plan offers three reimbursement options that suits the insured's needs and budget. However, this is the most expensive private health plan with some medical procedures calling for the insured to pay the entire medical bill upfront before being reimbursed by the insurer.
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Pros
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Your own private health insurance plan has several benefits. You can control your options by customizing what services you want to be incorporated into your plan. You don't have to pay for medical options that you don't use, which can happen in a group plan. You can shop around the private insurance market for a price that fits your budget. An applicant has the ability to choose what doctor they want to perform their medical services. An insured with a private health plan also has faster access to an elective surgery procedure.
Cons
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With private health insurance you will deal with higher premiums payments due to the rising health care costs. Also unlike being a part of an employer or government sponsored health plan, an individual can be denied health coverage if his current health status is poor or he has a pre-existing condition. Some plans limit your options such as requiring you to have a Primary Care Physician (PCP) ,who is in charge of all of your medical decisions. If your doctor doesn't approve of a certain procedure or you don't have a referral to see a certain physician, you may have to pay the entire bill even though you have insurance.
Significance
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Knowing what private health insurance can and can't provide may be the most important process you may go through concerning your health care coverage. In fact, this type of insurance may be your only option. This may happen if you are healthy and have a certain level of income, as both would eliminate you for consideration to enroll in a government-sponsored health plan. Your options are limited further If you are self-employed, unemployed or your employer doesn't offer an insurance plan.
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