The cost of medical service can be surprising. In 2016, U.S. health care costs were $3.3 trillion. That makes health care one of the country's largest industries. It equals 17.9 percent of the gross domestic product. In comparison, health care cost $27.2 billion in 1960, just 5 percent of GDP. That translates to an annual health care cost of $10,348 per person in 2016 versus just $146 per person in 1960. Health care costs have risen faster than the average annual income. The right health insurance plan can protect you from most of these costs. Ozark Hills Insurance can help you to find the right Health Insurance plan to protect you and your family.
What is health insurance?
Health insurance is a type of insurance coverage that covers the cost of an insured individual's medical and surgical expenses.
In health insurance terminology, a clinic, hospital, doctor, laboratory, healthcare practitioner, or pharmacy that treats an individual is known as the "provider." The "insured" is the owner of the health insurance policy or the person with the health insurance coverage. Depending on the type of health insurance coverage, either the insured pays costs out of pocket and is then reimbursed, or the insurer makes payments directly to the provider.
What are the types of Health Insurance?
Insurance can seem puzzling, but choosing the right product can be vital for your family's health in the United States.
There are two main types of health insurance, Private Health Insurance and Public Health Insurance
What is Private Health Insurance:
The Centers for Disease Control and Prevention (CDC) say that the U.S. healthcare system relies heavily on private health insurance. In the National Health Interview Survey, researchers found that 65 percent of people under the age of 65 years in the U.S. have a type of private health insurance coverage.
What is Public or Government Health Insurance?
In this type of insurance, the state subsidizes healthcare in exchange for a premium. Medicare, Medicaid, the Veteran's Health Administration, and the Indian Health Service are examples of public health insurance in the U.S.
Other types of Health Insurance
Insurers can also be categorized by the way they administer their plans and connect with healthcare providers.
What are managed care plans?
In this type of plan, the insurer will have contracts with a network of healthcare providers to give lower-cost medical care to their policyholders. There will be penalties and additional costs added to out-of-network hospitals and clinics, but some treatment will be provided.
What are indemnity or fee-for-service plans?
A fee-for-service plan covers treatment equally among all healthcare providers, allowing the insured to choose their preferred place of treatment. The insurer will typically pay for at least 80 percent of costs on an indemnity plan, while the patient pays the remaining costs as a co-insurance.
What are HOMs?
Health maintenance organizations (HMOs) are organizations that provide medical care directly to the insured. A primary care physician will usually be linked to the policy, and they will coordinate all necessary care.
HMOs will normally only fund treatment that is referred by this GP and will have negotiated fees for each medical service to minimize costs. This is usually the cheapest type of plan.
What are Preferred Provider Organizations (PPOs)
A PPO is similar to an indemnity plan, in that they allow the insured to visit any doctor they prefer.
The PPO also has a network of approved providers with which they have negotiated costs.
The insurer will pay less for treatment with out-of-network providers. However, people on a PPO plan can self-refer to specialists without having to visit a primary care physician.
What are Point-of-service (POS) plans?
A POS plan functions as a mix of an HMO and PPO. The insured can choose between coordinating all treatment through a primary care physician, receiving treatment within the insurer's provider network, or using non-network providers. The type of plan will dictate the progress of treatment.
Why is the type of health insurance plan important?
The type of plan dictates how an individual will approach getting the treatment they need and how much money they will need to pay on the day.
In 2003, the U.S. Congress introduced a new option, the Health Savings Account (HSA). It is a combination of an HMO, PPO, indemnity plan, and savings account with tax benefits. However, it must be paired with an existing health plan that has a deductible of over $1,100 for individuals and $2,200 for families.
HSAs can top up coverage, extending existing plans to cover a wider range of treatments. If an HSA is paid for by an employer on behalf of their employees, the payments are tax-free. An individual can build up funds in the HSA while they are healthy and save for instances of poor health later in life. However, people with chronic conditions, such as diabetes, might not be able to save a large amount in their HSA as they regularly have to pay high medical costs for management of their health concern.
These plans often carry a very high deductible, meaning that although premiums can be lower, people often end up paying the full expenses of any required medical treatment.
There is more overlap as plan types evolve. The distinctions between types of policy are becoming more and more blurred.
The majority of indemnity plans use managed care techniques to control costs and ensure that there are enough resources to pay for appropriate care. Similarly, many managed care plans have adopted some characteristics of fee-for-service plans.
Finding the right health insurance plan is important. Talk to Ozark Hills Insurance to find out more about how to find the right plan for you and your family.
West Plains, MO
1701 Porter Wagoner Blvd, West Plains, MO 65775
208 Chestnut St, Thayer, MO 65791
490 Third Street, Gainesville, MO 65655
Mountain Home, AR
405 AR-5, Mountain Home, AR 72653