Most health insurance plans fall under any or a combination of these three classifications of health insurance coverage:

1. Basic hospital insurance refers to costs associated with the stay in a hospital.  This
benefit usually has provisions and limits with regards to the maximum amount that will be shelled out by the insurance company, the number of hospital confinement days that the insurance policy holder is covered, the type of hospital room that will be covered and paid, as well as other specific limits that pertain to hospital stays.  The basic hospital insurance plan usually specifies in-hospital expenses (doctor’s consultation fees and medical procedures deemed necessary while policy holder or dependent is in the hospital).

2. Surgical expense insurance refers to a benefit of some health insurance plans that specifically covers the policyholder in the event of surgical procedures.  Usually, such a benefit’s coverage includes before, during, and after surgery expenses.  Different insurance plans have varying definitions of surgical procedures and each has its own inclusions and exclusions.  Usually, the amount of money shouldered by the insurance company is fixed at an invariable dollar amount.

3. Major medical coverage refers to a benefit offered with some insurance plans that do not discriminate if expenses are incurred in-hospital or not.  Benefits and financial claim limits are not specified by medical procedure.  Usually, there is a set limit amount for the whole health insurance.  This set amount may be for one health incident or for the insured’s whole lifetime.

Traditional Health Insurance Options

The individual may insure his and his family’s health through family insurance or employer comprehensive and expansive insurance.  Students can also enjoy health insurance plans that specifically cater to students.  There are also health insurance plans that are exclusive for children’s health coverage.  Moreover, there are the usual federal and state sponsored insurance plans that provide affordable health care to people in lower income brackets or to people who are handicapped in anyway.  One can also get health insurance specific to one health area such as in the case of dental insurance.

Special or New Health Insurance Options

As medical technology has evolved, so have the available health insurance options that an average person can choose.  The following lists the different and innovative health insurance plan alternatives that people currently have:

Medical Savings Account

The medical savings account is basically a tax-preferred insurance type.  This plan can be taken out by an individual through his or her own devices or through group insurance that offers this option.  The medical savings account is a savings account used for saving up money that is exempt from taxes.  The money in such an account should only be used for medical expenses.  Money accumulates and can even be withdrawn subject to limitations.  Cash used for medical expenses is withdrawn using a debit card or a checkbook.

MSAs are almost always used in tangent with major medical insurance or catastrophic insurance plans that have high deductibles.  Thus, MSA pays for the deductible up to the maximum amount available from MSA.  If the MSA account cannot fully cover the deductible amount, the difference becomes the individual’s responsibility.  For the amount above the deductible, the traditional insurance company policy takes over the payments.

Health Maintenance Organizations

Individual insurance or group insurance plans may take the form of Health Maintenance Organizations or HMO insurance plans.  HMOs pay for the care while it provides the care from a managed network of healthcare providers among which an insurance policy holder, “enrollee” in HMO lingo, has to choose his primary care physician.  The primary care physician has to be involved with every medical procedure, treatment and care that an HMO-covered individual undertakes.  The primary physician also acts as a gateway if the individual requires specialized treatment and care within and outside the HMO network.

Preferred Provider Organizations

Preferred Provider Organizations or PPO are similar to HMOs in that they are also composed of health care providers who are under contract with companies and other organizations to provide health care to covered individuals according to these companies’ or organizations’ terms.  Insurance policy holders with PPO plans can see providers who are outside the PPO network, but they must be prepared to shoulder more of the costs if and when they do so.  PPOs also get discounted rates from providers who agree to charge less for treatment and medical care in exchange for more referrals and patients from the PPO network.

Point of Service Plans

Point of Service (POS) plans are very similar to HMO plans in network management and the insured people’s care strategies.  However, POS plans are very flexible when it comes to medical service from providers that do not belong to the network.  A POS covered individual may go, without undue difficulty, directly to a physician or specialist outside the POS network of providers.  However, POS plan types usually have higher premiums in exchange for the greater flexibility.

The Costs of Health Insurance

There are personal expenses involved in health care.  These are expenses that the health insurance policy specifies as the responsibility of the policyholder himself or herself, and this may also refer to the individual’s burden share for the cost of his or her dependents’ medical care.  The following details the financial obligations that a policyholder generally has to fulfill in order to avail of his or her health insurance plan’s benefits:

1. Health insurance premiums are essential for continued quality health care.  The health insurance premiums vary by policy.  Generally, if the health insurance policy has been personally procured, the full burden of meeting the premiums is the individual policyholder’s sole responsibility.  In the case of employer-provided or sponsored group insurance plans, the company may pay for all the health insurance costs and the company or the individual may share the financial obligation.

2. Deductible is the minimum threshold.  This is the amount of money that an individual policyholder may have to pay before the health insurance kicks in and begins paying health insurance benefits.  This is not universal to all health insurance policies.  In plans that have a deductible, the required deductible amount varies.  This means it may be US$500, US$2500, more than $US2500, or any amount.  The initial deductible is inversely proportional with the insurance premiums.  This means the bigger the deductible amount, the smaller the premiums.

3. Coinsurance refers to the insurance policy holder’s share of healthcare costs, after the deductible is paid.  For instance, the insurance policy may provide that Magnetic Resonance Imaging is covered under the policy but the individual has to shoulder 20% of the costs of the said procedure that goes above the deductible.  The 20-80 split is the typical coinsurance clause for most policies that have this provision.  This applies to every individual covered under a health insurance plan.

4. Co-payment (Copay) is the fixed amount of money that the insured has to pay for a specific medical service as outlined in his health insurance coverage.

5. An out-of-pocket maximum amount is required by some insurance companies before they begin paying for medical costs.  This may include the deductible.  But essentially, the out-of-pocket maximum is the amount of money the insurance company expects an individual to shoulder every year for medical services.  After the annual out-of-pocket maximum of the individual has been reached, the insurance company takes over.

6. Medical expenses incurred which fall beyond the lifetime maximum of the health insurance becomes the individual’s responsibility.  This means that there is a certain maximum that the insurance company will pay, beyond which the insurance policy holder effectively no longer has health insurance coverage.

7. Exclusions and limitations are other health care costs that the individual has to take care of.  Exclusions are generally those medical procedures and services that the insurance company cannot feasibly include at the level of premium that the insured party’s are paying.  It can also include services and procedures that the insurance company has deemed unnecessary.  Limited services refer to medical procedures and services that are limited only to certain circumstances and are not generally available.  For these excluded and limited services, one has to make his own arrangements and pay using his personal resources.