The Healthcare Maze: Health Insurance Types Explained

By Nidhi

When seeking medical attention in the United States, you may feel overwhelmed by the system's complexity, especially regarding insurance and the many types of coverage available. In a country with so many disparate opinions on what is best for the nation, navigating this maze isn't easy. Fortunately, just like any maze, this one has an exit. To make your search less stressful and much quicker, we've put together useful information outlining some of the most common healthcare insurance types so you can make a well-informed decision.

Health Insurance Basics

Health insurance pays for medical expenses, whether planned (such as a trip to the hospital for surgery) or unplanned (such as an unexpected car accident that results in medical treatment). 

There are different types of health insurance, including: 

- Public health insurance - Public health insurance, often called government-run health insurance, is the health insurance system provided by the government. 

- Private health insurance - Private health insurance is health insurance provided by private companies and individuals. Private health insurance can be either short-term or long-term. 

-Supplemental health insurance - Supplemental health insurance is health insurance that is used to cover any remaining uncovered medical expenses after a primary health insurance plan has paid its share.

-Student health insurance - Student health insurance is health insurance offered to students. It is often part of a university's health plan.

Types of Individual Health Insurance

The most common types of individual health insurance include:

- Short-term health insurance - Short-term health insurance is health insurance that provides coverage for a limited period, usually one year or less.

 - Long-term care insurance - The plan helped pay for institutional care like nursing homes and assisted living facilities.

- Health insurance for individuals with preexisting conditions - Health coverage for those with preexisting diseases gives people with preexisting conditions access to health insurance. 

- Health insurance for young adults - Health insurance for young adults insurance coverage for individuals too young for other types of health insurance coverage.

 - Health insurance for individuals over 65 - Health insurance for those who are above the age of 65 years. 

- Health insurance for individuals with a health condition - Health insurance for individuals with a health condition provides health insurance coverage to individuals who have a particular health condition, such as specific cancer. 

- Health insurance for individuals with a disability - Coverage for medical expenses for those with a physical or mental impairment is provided by disability health insurance.

U.S. Individual Health Insurance Plans

You can choose from various plans and premiums among the roughly one thousand private health insurance companies operating in the United States. However, in addition to the single-person programs, family-oriented group plans are also available.

Tradition fee-for-service: These insurance tend to be the most expensive, making it difficult for those with incomes below the national average to afford them. But these programs provide you with the greatest leeway and are thus the ideal ones to choose from.

HMOs, or health maintenance organizations: Limit patients' freedom of choice in healthcare providers but provide other benefits, including reduced out-of-pocket expenditures and greater coverage for preventative services. The National Committee for Quality Assurance checks them out and grants them accreditation if they measure up to standards.

Preferred Provider Organizations (PPOs): It's true that PPOs are comparable to HMOs in that they both provide you access to a predetermined group of medical professionals at lower rates, but PPOs also give you more leeway in choosing which of those professionals you actually end up seeing.

Employer-Based Health Insurance

Employer-based health insurance is health insurance that is provided by an employer. Employer-based health insurance plans are tax-advantaged plans which means that the employer can deduct the cost of providing this insurance from their income taxes. The value of a health insurance plan offered by an employer is often not taxed on the worker. 

To comply with the law, businesses that offer their workers' health insurance must supply what is known as "minimum essential coverage." This is coverage that meets a certain standard set by law. In terms of employee health insurance, companies can provide either temporary or permanent plans. If an employer decides to provide short-term coverage, the employees will have to purchase their own long-term health insurance coverage. 

Employer-based health insurance plans can either be group health insurance plans or individual health insurance plans. If the employer offers group health insurance plans, the employees will be part of a group and pay a lower rate. Employees covered under individual health insurance plans will have to pay a higher rate.

 While employer-based health insurance is an excellent benefit for employees, it can be challenging to switch employers if you want to change health insurance plans.

Medicaid and CHIP (Children's Health Insurance Program)

Medicaid and CHIP are government-run health insurance programs for individuals with low incomes. Medicaid is available in every U.S. state and territory, while CHIP is only available in certain states. In case you are pregnant or have a kid under the age of 18, you may qualify for the CHIP. And if you are an adult, you will qualify for Medicaid.

Medicaid or CHIP are also eligible for a government-run health insurance plan called Medicare. Individuals who meet the requirements for either Medicaid or the Children's Health Insurance Program (CHIP) will be enrolled in a government-sponsored health insurance program without involvement. 

Most people are not allowed to switch health insurance providers. If you qualify for public health insurance programs like Medicaid or CHIP, you may also get financial assistance to put toward the cost of a private health insurance policy.

Medicare Basics

Medicare is government-run health insurance for individuals who qualify based on age or a physical or mental disability. The United States federal government oversees the Medicare social insurance program. Medicare is funded by a combination of general revenue and premiums paid by individuals who qualify for Medicare coverage. 

The following types of health insurance plans fall under the Medicare umbrella: 

- Medicare Part A - Medicare Part A is hospital insurance, also known as inpatient care. 

- Medicare Part B - Medicare Part B is medical insurance, also known as outpatient care. 

-Medicare Part C - Medicare Part C is also called Medicare Advantage. It is a combination of Medicare Part A and Medicare Part B. It doesn't allow you to go to any doctor or hospital you choose. However; the main benefit of a Medicare Advantage Plan is that it allows you to use Medicare funds to cover your healthcare expenses and buy additional private health insurance plans to cover any costs not covered by Medicare. 

-Medicare Part D - Medicare Part D is prescription drug coverage.

Obamacare, or the Affordable Care Act

A federal law that former President Obama enacted called the Patient Protection and Affordable Care Act mandates that all citizens have health insurance or face financial penalties. Designed to reduce health care costs while improving access for all Americans, the Act finances subsidies for low-income families by taxing healthcare providers and high-income households.

In an effort to have more young, healthy individuals contributing to insurance costs, the Affordable Care Act permitted parents to add their children up to the age of 26 to their coverage. It also made it, so low-income people didn't have to go without care because of chronic conditions.

How to pick a solid healthcare policy?

• Does that plan provide you the freedom to visit any doctor, hospital, clinic, or pharmacy you want?
• Are specialists such as ophthalmologists and dentists covered?
• Is the plan comprehensive enough to cover unique ailments or treatments such as pregnancy, mental care, and physical therapy?
• Does the plan cover in-home or nursing home care, as well as prescriptions prescribed by a physician?
• How much are the deductibles? Is there a co-payment?
• How much will you have to spend out of your own money to meet expenses?

Summary

Health insurance pays for medical expenses, whether planned (such as a trip to the hospital for surgery) or unplanned (such as an unexpected car accident that results in medical treatment). There are several different types of health insurance; with Insuranceandleisure.com, you can now decide on the best healthcare policy to select from.