Making Sense of Health Insurance
The term health insurance refers to a wide range of policies that cover the costs of doctors and hospitals to those that meet a specific need, such as cancer or long-term care. Disability insurance is also considered health insurance, even though it’s not specifically for medical expenses, but covers expenses experienced during a medical crisis.
Most people are familiar with the kind of insurance offered by employers to employees that covers medical bills, surgery, and hospital expenses. These kinds of comprehensive, or major medical, health insurance policies refer to the umbrella protection they offer. However, neither of these terms are particularly helpful to the consumer.
When broad health care coverage is mentioned today, instead of using the term "major medical," they are more likely to refer to fee-for-service or managed care. These terms apply to different kinds of coverage or health plans. he norm today is also referred to specific kinds of managed care plans: health maintenance organizations or HMOs, preferred provider organizations or PPOs, and point-of-service or POS plans.
While fee-for-service and managed care plans differ in important ways, in some ways they are similar. Both cover an array of medical, surgical, and hospital expenses. Most offer some coverage for prescription drugs, and some include coverage for dentists and other providers. But there are many important differences that will make one or the other form of coverage the right one for you.
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