Health insurance is insurance that pays for all or part of a person's healthcare bills. Healthcare costs include doctor visits, hospital stays, surgery, procedures, tests, home care, and other treatments and services. The different types of health insurance are group health plans, individual plans, workers' compensation and government health plans such as Medicare and Medicaid.
Health insurance can be further classified into fee-for-service (traditional insurance) and managed care. Both group and individual insurance plans can be either fee-for-service or managed care plans.
A Health Savings Account (HSA) is a tax-advantaged medical savings account available to taxpayers in the United States who are enrolled in a High Deductible Health Plan (HDHP). The funds contributed to the account are not subject to income tax, but can only be used to pay for qualified medical expenses. HSAs were established as part of the Medicare Prescription Drug, Improvement and Modernization Act, which was signed into law by President Bush on December 8, 2003. These accounts are a component of Consumer Driven Health Plans.
Major Medical Insurance
That form of medical insurance designed to supplement a basic medical expense plan in the event of extraordinary medical expenses that the average person cannot pay without great hardship. There is usually a deductible or coinsurance or both involved.
Under a copayment or copay provision, the insured usually is required to pay a set or fixed dollar amount each time a particular medical service is used. Copay provisions are frequently found in medical plans offered by health maintenance organizations (HMOs) where a nominal copayment is applied to each office visit and to each prescription that is filled.
Hospital Expense Coverage
Hospital expense benefits provide for expenses incurred during hospitalization. Indemnities usually fall under two broad groups:
- Room and board - including nursing care and special dietary requirements
- Miscellaneous medical expenses - including x-rays, lab work, medications, medical supplies and operating and special treatment rooms
In some cases, benefits might be included for certain surgeries and related costs, such as pain killers given during a hospital stay.
Surgical Expense Coverage
Surgical Expense Benefits fall under two plans, scheduled and non-scheduled:
In the scheduled plan, surgical expense policies pay the fees incurred from the surgeon's services and related costs incurred when the insured has an operation. Typical related costs include fees for an assistant surgeon, anesthesiologist and can even include the operating room when it is not covered as a miscellaneous item.
In a non-scheduled plan, when surgical benefits are not listed by a specific dollar amount in a schedule, the policy will pay based on what is considered usual, customary and reasonable in a certain geographical area and is also known as UCR.