An Introduction to Health Insurance

Henderson Insurance Agency of Harrisburg, PA understands how confusing health insurance can seem. We’re here to explain the basic though, so you can make an informed decision.

Health insurance comes in two main forms – private and public. An individual normally obtains a private health insurance policy from their employer or school or by purchasing it directly. A public health insurance policy comes from the government through a program such as Medicare or Medicaid or an agency including the Veteran’s Health Administration and the Indian Health Service.

While both types generally require a premium payment, usually on a monthly basis. This keeps the policy open and active.

While every health insurance plan differs in coverage, in general, they pay for or defray the cost of visiting a health care provider. This can refer to a doctor, hospital, physical therapist, etc.

Some insurance plans offer fully covered wellness visits, while others require a co-pay for a simple annual checkup. The co-pay, or portion the insured pay out of pocket for each visit, varies by plan and insurer.

Even among private insurance plans, there’s no single type. You can choose from five major types of plans:

  • managed care plans provide the insured with a network of lower-cost healthcare providers from which to choose. This plan type charges a penalty or fee for treatment by an out-of-network provider.
  • indemnity plans also called fee-for-service plans, provide a greater choice of providers since the insured can choose nearly any place of treatment. The insurer generally pays about 80 percent of the treatment cost, while the patient pays the rest.
  • health maintenance organizations (HMOs) directly provide medical care to the insured. They have negotiated fees with each healthcare provider. The policy usually assigns a primary care physician to the patient to coordinate all necessary care.
  • preferred provider organizations (PPOs) resemble indemnity plans because they let the insured visit any doctor. Like an HMO, the PPO has negotiated fees with each healthcare provider. It pays for part of an out-of-network provider visit and patients can go to a specialist without a referral.
  • point-of-service (POS) plans let the insured mix and match the best from an HMO and PPO. It lets the insured pick between having a primary care physician coordinate treatment, getting treatment within the provider network and visiting non-network providers.

Picking a health insurance plan helps you pay for wellness care and emergency care. It is important to choose the right plan though so you do not trap yourself for a year or more since in the US, you must wait until open enrollment to switch coverage unless you meet a legal exception.

Call us at Henderson Insurance Agency of Harrisburg, PA for other questions about health insurance. We’re here to help you get the coverage you need.