Health Insurance Basics
By: JeffCline Date: Thu, 10 Dec 2009 Time: 7:33 PM
The importance of health insurance in this day and age cannot be overlooked. One main reason why health care insurance has become very important is that health care has become very expensive over the last few years. This can be attributed to the advancements that have taken place in the field of medical sciences. New technologies have led to development of new methods that can be used for treating various kinds of diseases. To bear medical expenses these days has become more of a problem for people these days.
The type of insurance which covers all types of medical expenses and health care expenses that people bear is known as health insurance. This insurance can be provided by private firms and agencies or by government funded agencies who deal in insurance policies. Health care insurance can be purchased either individually or by many people together as a group.
Individuals may purchase this insurance for themselves. In this case, the health care insurance becomes individual health care insurance. When this insurance is purchased by an organization to cover the medical expenses of a group of employees, this insurance is called group based health care insurance.
Health insurance basically involves a contract between the person getting insured and an insurance company which may be a private firm, a government agency or a non profit organization that deals in selling insurance plans. The main purpose of an insurance company is to evaluate the cost of medical expenses that a person might incur in a given period of time. On the basis of this evaluation and the needs of the person buying the insurance plan, a financial plan is developed. This financial plan may be the one which pays a premium every month. The financial plan may even be developed for a year where a tax is paid annually. The type of financial plan developed is basically the discretion of the insurance company and its policies.
There are several types of health insurance plans that are available these days. Employment based health care insurance plans are the ones which an organization buys for its employees.
Direct purchase plans are individual health care insurance plans. These plans can be purchased by any individual. And is individually underwritten.
A comprehensive health insurance plan is the one where only a part of the total medical expenses is paid by the insurance company. You may also here these plans being referred to as catastropic insurance. The main purpose is to cover you if something major should occur, not routine doctor visits.
Scheduled health care insurance plans are the ones which provide for day to day health care expenses. Scheduled insurance however has fewer benefits as compared to comprehensive health care insurance plans.
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