Facts About Private Health Insurance
Private health insurance is one of three health coverage options available to United States citizens . The other options are government- and employer-sponsored health plans. Two main types of private health coverage, managed health care and indemnity health plans, are different in the ways they provide health coverage. These two plans provide an applicant the choice between having health coverage at a reasonable cost or the flexibility to control medical care decisions.
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The Facts
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Private health insurance is coverage provided through an entity either for profit or not for profit and other than the federal or state government. In 2007, more than 202 million Americans had private health insurance, compared to 83 million who were enrolled in some type of government-sponsored health plan and 177 million who were covered through an employer. According to the America's Health Insurance Plans, the average individual annual premium in 2006-07 was $2,613 or about $218 monthly.
Managed Health Care Plans
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Managed health care plans are chosen by people who want to have quality care at an affordable price. There are three types of plans that are considered managed health care: HMO (health maintenance organization), PPO (preferred provider organization) and POS (point of service). While each of these plans has different characteristics, all three are designed to provide cost-efficient health care by providing a member with a network of physicians in their geographical area to administer medical care at a contracted price. The insured can benefit from low out-of-pocket costs by using the services in-network. Non-network care will result in higher co-payments, deductibles and/or coinsurance for the members, and in some instances, the member will be responsible for the entire bill even while insured.
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Indemnity Health Plans
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The oldest type of medical coverage, indemnity health plans are often referred to as the "traditional" plan. This plan reimburses the insured for services received, after the insured files a claim. Indemnity health plans include three options, two of which are similar reimbursement plans. One option will pay 100 percent of the claim, while another option will pay a percentage, up to 80 percent, of the bill. The insured is responsible for the remaining balance. The third option pays the insured a specific amount of money for services a day for a maximum number of days. This plan provides the most flexibility of all private health plans as the insured can seek medical attention from any doctor regardless of location. However, this plan is also the most expensive, and it requires the insured to complete the claims accurately and to submit them in a timely fashion. Some situations may call for the insured to pay the entire bill before being reimbursed by the insurer.
Benefits
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There are several benefits to owning your own health insurance plan. You have the peace of mind knowing that you are in control of your plan and any changes in terms of agreement are done with your consent. If you have such a plan, you can customize the plan to include services that you want to pay for and eliminate those that are not needed. You can keep your insurance if you move or change jobs, something that isn't allowed if you participate in an employer-sponsored plan. A private plan may include incentives for joining health clubs or using alternative health treatments.
Drawbacks
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Some of the drawbacks of having your private health insurance plan include paying for the premiums, which are rising at a tremendous rate (12 percent annually), a major factor in the increase of uninsured Americans. Also, an applicant runs the risk of being denied coverage due to current medical status or a pre-existing condition. A person would not be excluded from a government- or employer-sponsored plans for those reasons.
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