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  1. The Importance of Health Insurance

  2. The Types of Health Insurance


The Importance of Health Insurance

According to the Wall Street Journal, there was a 43 year-old man who lives in Herndon, Virginia. He wanted to save money, so he didn't buy health insurance. One night he had a sudden chest pain and was rushed to a nearby hospital emergency room, and later was transferred to Fairfax Hospital. He was judged likely to have suffered a heart attack. After he had some emergency surgery, his condition became stable. The next morning he immediately discharged himself out of the hospital, not even considering if his condition permitted it. Because he did not have health insurance, he worried about how he could pay for medical expenses. Alas the hospital gave him a bill, a total of nearly $40,000 dollars.
In general, under a contract the hospital and health insurance company have agreed on discounted prices. Whether the insurance company pays, or the patients pay some of the medical cost themselves, the total price is considered reasonable.
If he had health insurance in this case, he may only need to pay $ 100 at least, or at the most pay a few thousand dollars depending on the insurance plan.
But patients without health insurance not only pay the original price, but also have the risk to pay an average of 232% to 673% of maximum cost according to some study. The hospitals' asking price is usually the number you must pay. There is no bargain. If you do not pay, sometimes the hospital will use legal means to get their money. They may try the salary deduction (garnish wages) or put a lien on a patient's home. Many hospitals are non-profit organizations and have a charity responsibility for poor patients. But in contrary, they often increase the price several times the original cost for patients without insurance. That is why there is huge amount of people filing bankruptcy due to expensive medical bills.
A heart bypass surgery may cost $60,000. A hysterectomy is about $19,500.
Further more a heart transplant could cost 1.5 million dollars. Most people can not afford it except for insurance companies or millionaires.
Nobody likes to be sick, but no one can control not getting sick or an unexpected accident. Therefore we should plan our future, make hay while the sun shines. Applying for health insurance while you are healthy will ensure access to the best treatments when you need them. You will not have to worry about the medical bills, which may add a burden to yourself or your families.


The Types of Health Insurance

You might often hear about PPO or HMO health insurance plan, but might be not sure what the differences between them and what they represent.  Let me introduce you to the four most common types of health insurance.  

PPO: Its full name is Preferred Provider Organization. It is the most popular type, because it is relatively free and flexible. Furthermore the insurance companies usually negotiate with doctors and hospitals to obtain discount price for certain medical procedures. If you go to their network doctors the price will be much cheaper. You can also go out of the network to see a doctor, just need to pay higher fees.  When you see a specialist, there is no need to get a referral from your primary doctor.  

For the PPO plans, you want to make sure the network is big enough, the bigger the better. Thus the doctors you like will more likely be in the network. Large national networks like Blue Cross Blue Shield usually offer a larger choice of doctors. 

HMO: Health Maintenance Organization is its full name. Kaiser Permanente is the most common HMO system. One of the key features is that you must have your primary doctor’s referral in order to visit a specialist. It is somewhat time-consuming and inconvenient, but its premium usually is slightly less expensive than similar types of PPO plans.  

Lately, some insurance companies have done some revisions to provide Open Access HMO. That is, you do not need to go through a primary doctor; you can see the specialist directly.  

The HMO requires you to visit physicians within the network of the insurance company.

It is a very important rule that you have to remember. Insurance companies will not pay your medical expenses outside their network unless it is a true emergency.  

POS: Its full name is Point of Service. It offers features midway between the HMO and PPO plans.  POS plans use the same network as HMOs.  You can consider POS as an HMO plan. However it allows you to visit doctors outside their network. The fees for physicians' visits outside the POS network are slightly higher than those you would pay to visit an HMO physician. 

In general, the premium of POS plan is slightly higher than HMO and cheaper than PPO plan.  POS health plans are usually offered through group coverage only.  

Indemnity: It is a traditional type of health insurance. It has existed for a long time. Indemnity plans allow you to visit any doctor. However, a visit to a network physician normally costs less than a visit to a doctor outside the network. If the out of network doctor ask for higher than the allowable charge, you will need to pay the difference. It is similar to PPO plans and offers freedom and flexibility.  Care First Personal Comp offered in Maryland is a typical Indemnity plan. It is an inexpensive and popular plan. 

For further formation, call Chilang Weiler, health insurance consultant of Key Health Solutions at 703-922-4124.