Commercial health insurance is the most commonly used health insurance in the country because it is, in reality, any health insurance that is not offered by any state, local or federal government entity. These “for profit” or commercial insurers provide coverage for individuals and groups. Groups are often part of a company, which offers employee benefits, though some group insurance plans are actually made up of member of a particular association. As a rule, group health insurance plans are far less expensive for the insured than individual plans because the insurer offers the employer or the association a cheaper “group plan” rate. The company or association then agrees to pay a portion of the premium for the individual in the group or association as a benefit for being part the group.
Of the two types of group plans, the company employee plan is the most common. The criterion for eligibility is based on the number of hours the employee works, whether the employee is part time or full time and longevity the employee has with the company. Most employee group plans will add a new employee to the plan after a brief period with the company, usually 90 days. The longer the employee remains with the company, the better the health insurance plan he or she may be entitled to receive as a benefit. This might include a broader spectrum of coverage or a lower employee contribution toward the premium for the coverage.
There are primarily three formats of health insurance plans currently offered by insurers.
The three different models include the “point of service” plan, the “health maintenance organization” or “HMO” plan and the “fee-for-service” or “indemnity” plan.
By far, the most popular plan these days is the “point of service” plan, or POS, which lets the insured choose which doctor he or she would like to use. The insured must pick from a predetermine list of physicians provided by the health insurance company, but this allows for the insured’s co-payment to be must less than if he or she uses a doctor outside of the insurance company network of primary care providers.
The “health care maintenance organization” plan places a greater emphasis on preventive medicine; regular office visits with a doctor to keep the insured “on track” with their general health care. This plan will also allow the insured to choose his or her physician from a list of predetermined doctors in the plan’s network and the co-payment is very small. However, one major difference between an “HMO” plan and a “point of service” plan is that the “HMO” plan will rarely, if ever, pay for a “specialist” unless that “specialist” has been directly referred by the insured’s primary care physician.
The “fee-for-service” plan is a scaled down plan. Also known as the “indemnity” plan, it will allow the insured to see any physician he or she wishes to see, but it may or may not pay for hospital care, depending on the scope of the plan in place.
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