Why do some people think they don't need health insurance? Many look at their debts, wages, and health and decide to take a chance and not pay for health insurance. Maybe other expenses are more of a priority. Health insurance provides money to pay for care due to illness or injury in exchange for paying a premium. Health insurance is a need, not a want. There are other things you should go without first.
Once you realize health insurance is necessary, what coverage do you get? Health insurance plans can fall into two categories, traditional and managed care.
Traditional Indemnity Plans
An indemnity plan allows you to pick the doctor, specialist, or hospital you want. In exchange, the insurance company pays a set portion of your charges. These plans are often called fee-for-service plans. This may be the right kind of plan for you if you want to choose your own doctor and want to visit a specialist without obtaining a referral; but the coverage can be more expensive.
Managed Care Plans
These plans use a network of doctors and hospitals and require you to see participating doctors. These plans have grown over the years and offer different levels of choice. Some plans only pay for care from their network, while others allow you to see other specialist doctors but charge you more. These plans are often referred to as HMO (health maintenance organization), POS (point of sale options), or PPO (preferred provider organization). The plans are more affordable due to the limited choice of doctors.
Level Up!
Use what you've learned about health insurance to answer the questions below. Read the scenario and decide if it is describing a traditional indemnity plan or managed health care plan. Keep trying until you have all the answers correct.
1. Kamel really likes his doctor and doesn't want to switch to anyone else, so he purchased health insurance coverage that allows him to choose his doctor and hospital.
You pick the doctors you want but the coverage can be more expensive.
You pick the doctors you want but the coverage can be more expensive.
2. Sarah's health insurance coverage uses a network of doctors and hospitals.
Some only pay for care from doctors within their network, while others allow you to see other specialist doctors but charge you more.
Some only pay for care from doctors within their network, while others allow you to see other specialist doctors but charge you more.
3. Cameron is happy that his health insurance is more affordable than other plans, but he also has a limited choice of doctors.
These plans use a network of doctors and hospitals and you are required to see specific doctors.
These plans use a network of doctors and hospitals and you are required to see specific doctors.
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