Health insurance is a financial measure taken as a precaution by the insured against unforeseen medical emergencies or situations that may arise in the future. It typically involves payment plans that cover healthcare-related expenses like drugs, hospitalization, accidents, dental care, etc., when the need arises. To answer the above question, we have outlined some of the basic information to help you make an informed conclusion on health insurance models.
What you will be learning about
This article provides an insight into:
– The types of the health insurance market.
– The types of insurance are found in the two main health insurance markets: the group market and the individual market.
– the benefits of both types of health insurance to ascertain which is the leading model/most favorable.
– the cons and differences to help you understand both, and possibly decide which you would prefer.
Types of health insurance markets:
– The group market
– The individual market
– Large and small group market
The group market and the individual market are our major concerns in this article. This is because the third type–larger and small group market– is the same as the group market, with the main difference being the types of employers- large and small.
The Group Market
The group market is, put simply, where a person obtains the health insurance policy for themselves and family members or other dependents (as a group); or where they obtain the same as set up by their employer. The group market is often implied to be the leading health insurance model because it consists of group insurance schemes, which usually contain far more reaching benefits than individual health insurance. Read on to understand how.
● Group Health Insurance
The group or corporate health insurance is a type of group health plan with an insurance scheme that an employer or leader of an organization sets in place for all their employees or members. Part of the premium(the amount to be paid for an insurance policy) is covered by the organization, while the remaining part is deducted on a regular basis from the employee’s salary. Such said, employees can accept or decline the offer based on their individual needs.
Types of Group Health Insurance Plans
There are different types of group health insurance plans. They include Level Funded plans, Health Maintenance Organization (HMO), the Preferred Provider Organization (PPO), Exclusive Provider Organization (EPO), Fully Insured Plans, Self Funded Plans.
All these come with varying factors and specifications that qualify one for them. For some companies, you will be at liberty to chose that which suits you and your listed dependants.
Benefits of group insurance
Group insurance has benefits for both the insurers, the employer, and the employees. Some of these include:
- Much lower premiums for the employees to pay than what is obtainable from individual insurance, even though most of the benefits are the same.
- With the insurer’s understanding of their clients, there is an improved efficiency at managing the specific uncertain events they underwrite.
- Tax credit to eligible small employers who provide group health insurance for their employees.
- It includes and covers people with preexisting medical history.
- Group insurance sometimes includes coverage for other dependents like your family members in the insurance scheme.
Cons.
● In some group health plans, there are very limited allowances when it comes to the choice of health care facilities and attendants, except in extreme situations.
● You might not be eligible for any additional benefits aside from that of the premium coverage.
● The health insurance coverage is terminated the moment you stop working for the company.
The Individual Market
The individual market in this context refers to the market where a person can obtain their personal insurance coverage as individuals rather than as a group.
● Personal health insurance
This covers the insurance of expenses for medical treatments, checkups, injuries, and other conditions like that which an individual pays for by themselves.
Types of Personal Health Insurance
Affordable Care Act(ACA) /Obamacare plans
The Affordable Care Act, also referred to as Obamacare, typically takes care of those in need of both regular and emergency medical care with a less severe impact on their personal finances. It is open to all those who meet up with the cutoff to apply and helps with healthcare routines like check-ups, drugs, hospitalization, etc.
Short-Term Insurance Plans
They do not cover preexisting medical conditions and take care of fewer health care needs, but can be beneficial to individuals with unexpected medical emergencies.
Medical Indemnity insurance
If the cost of a hospital visit is $35, this type of insurance plan will provide only the specific amount that was fixed for such a service, be it higher or less than what you need.
Benefits
- The individual can claim any additional benefits like a discount upon renewal, unlike that of the company where the employer might not allow this.
- The policy remains valid until you decide to terminate it.
- You get to choose whatever plan you want without the restriction of taking that which an employer presents.
Cons.
– People with preexisting medical history are hardly considered.
– You bear all the premium costs.
In conclusion,
Statistics have shown that medical emergencies cause more than fifty-five percent of personal bankruptcies in the United States. Getting insurance is a necessary step towards ensuring a more secure future for both you and your family. You are in a better position to decide which type of health insurance is more suitable for you. But going by the benefits of both, it is quite safe to say that the group market is the leading health insurance model.
