Which Individual Health Insurance Plan Is Right For You?

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In these days of rising medical costs it is only natural that you should shop around to find the best deal when it comes to an individual health insurance plan and, for most people, that means looking for a good insurance company offering cover at an affordable premium. Unfortunately, it is not quite that simple.

Before you start to worry about how much you are going to have to pay for health insurance you must first determine the type of health insurance that you need, as there are several different forms of individual health insurance plan available today.

There are essentially three main types of health insurance.

The first is tradition indemnity (fee-for-service) insurance. This is a form of insurance that many people will be familiar with and which, a few years ago, was the dominant form of health insurance. Today, however, it is generally considered to be an expensive option.

Indemnity health insurance is not designed to cover day-to-day medical care but instead provides cover for unexpected illnesses and, more often than not, allows the policyholder considerable freedom when it comes to choosing where to go and who to see for treatment. The policyholder is also responsible for much of the administration of an indemnity policy and is required pay his own medical bills in the first instant and then to complete the necessary claims forms to gain reimbursement.

Because indemnity insurance is designed to meet unexpected medical expenditure policies will seldom cover routine medical bills.

The second form of health insurance is referred to as managed care and the best known example of this is the original Health Maintenance Organization, or HMO.

The principal behind HMOs is to reduce overall medical costs by focusing attention on keeping the policyholder in good health and catching potential problems at an early stage when they can be treated easily and relatively cheaply. Accordingly, HMOs focus on providing cover for routine medical care and for such things as screening and check-ups.

There are two other significant differences between indemnity insurance and managed care. The first is that managed care operates within a managed care organization and the insurance company handles all of the paperwork and the payment of bills. The second is that, because treatment must be carried out within the managed care group, the policyholder has far less choice over where and from whom he receives treatment.

HMOs were not generally well received when they were first introduced and came in for a great deal of criticism, much of which was justified. HMOs have done much in recent years to meet this criticism and have been largely successful in doing so. However, this process has also given rise to the third form of health insurance today, and one which is gaining rapidly in popularity, Preferred Provider Organizations, or PPOs.

PPOs are essentially a mix between indemnity and managed care with care being provided normally under the umbrella of a managed care organization but with policyholders having the freedom to seek treatment outside of the organization in certain circumstances.

Which form of insurance will best suit your needs if course dependent very much on your personal circumstances. If you are young, fit and healthy and visit the doctor once in a blue moon then you may feel that indemnity insurance would best suit your needs. If, on the other hand, you are married with four young children and have a history of health problems within the family then the focus on preventative medicine provided by managed care may be more attractive to you.

The important point to remember here is that your starting point in looking for an individual health insurance plan should be to decide upon the type of plan that you need and only then should you move on to look at how much it is going to cost.

Additional information:

Includes details of state health and medical services, resources, office locations and specialty programs for targeted.

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