Health insurance is a basic requirement for affordable quality health care.  It provides the health insurance policyholder health care options and resources for himself or herself and for his or her family on the face of the rising costs of medical care.  Basically, health insurance is protection against fatal and non-fatal illnesses.

Health – Status Dependent

As this type of insurance is primarily for medical expenses, the insurance coverage provided by the insurance company depends mainly on the primary policyholder’s health status or medical condition.  The higher the risks to a policy owner’s health, the higher the health insurance premiums are going to be.

However, the law protects against discrimination in employer-provided group health insurance.  Even if an employee presents more risk to the group because of an existing medical condition, the law prohibits the employer from levying higher insurance premiums to the high-risk individual.  This means that whatever the insurance premiums collected from one employee must be the same premiums taken from others.

Access to Health Insurance

An individual has access to health insurance through Individual Health Insurance Policies or Group Insurance Plans.  With the former, the individual takes out and pays for his own health insurance policy, while the latter denotes purchase of health insurance as a benefit of being employed by a certain company or by being a member of a union, association, or organization.  The former is pretty straightforward, while the latter has varying specifications and attributes which depend on the group policy itself.  For instance, the company’s health benefits may specify full payment of the individual’s health insurance premiums.  Otherwise, the company may make a defined contribution that is proportional to the employee’s contributions (e.g. the company may contribute twice the employee’s contributions).

The beauty of individual health insurance is the flexibility and control it offers the policyholder.  The individual has the right to choose his or her own health insurance scheme.  He or she may also choose how much medical insurance to avail.  With group health insurance plans, the individual is offered a fait accompli.  This means one can take the policy or leave it.  If an individual doesn’t want to avail of the group health insurance plan, he or she can generally refuse and take out his or her own insurance plan.  He or she may also choose to supplement the group health insurance policy with a personally procured one.

There is another weakness to the group health insurance policy.  This is the fact that group health insurance plans vary across the board; that is, different companies, unions, organizations, and associations offer different health care plans.  This presents a difficulty for a highly mobile individual who is prone to transfer from one company or group to another.

While it is generally possible to transfer with minimum adjustments and difficulty, the premiums already paid from one group health insurance plan to another cannot be guaranteed that the insurance benefits inherent in a previous group health insurance policy can be transferred over to the new one.  The new group health insurance policy may not cover the same medical procedures covered in the previous plan.  Moreover, the transferee may be subject to another waiting or affiliation period that he or she may have already undergone in the previous plan.  There may also be a new preexisting condition period that needs to be satisfied in the new group health insurance policy.

Fee-for-Service versus Managed Care

There are two basic types of health insurance:  Fee for Service and Managed Care.  As the name suggests, fee-for-service type of insurance provides recompense for medical care or procedures taken that are covered under the specific individual or group health insurance plan.  The physician may be anyone since the costs of the treatment will be reimbursed by the insurance company through the individual policyholder or the physician who did the medical service.  However, most fee for service plans do not offer full payment for medical procedures and treatment expenses.

The managed care insurance plan type, on the other hand, is generally more comprehensive than the fee for service type.  Its main difference from Fee for Service plans, however, lies in its network of physicians who are affiliated with the health insurance company or organization.  Only member physicians and medical practitioners may be approached by the insurance policy holder under a managed care insurance plan type.  The presence of a network of practitioners results in preferential prices and cost of treatments.  This makes managed care widely preferred by health insurance providers.

Coordination of Benefits Provision

Health insurance benefits for a certain health incident can only be claimed once.  Thus, if a husband and wife have separate health insurance plans, they cannot claim from the insurance company in the event of their children being afflicted with illnesses or diseases.  Where the insurance coverage of one of them is more than enough coverage, the spouse cannot claim for the same benefit in his/her own insurance plan.  Moreover, insurance plans will not pay for more than the actual medical expenses.