Understanding Health Insurance

What Is Health Insurance?

Health insurance is a way to pay for health care1. It protects you from paying the full costs of medical services when you’re injured or sick. Just like car insurance or home insurance, you choose a plan and agree to pay a certain rate, or premium, each month. In return, your health insurer agrees to pay a portion of your covered medical costs. Payments by your health insurance are typically based on discounts they negotiate with doctors and hospitals.

What are the types of health insurance?

There are various types of health insurance. Medical health insurance may be attained for you and your family through a private insurer, through an employer, or through the Government, also known as public health insurance.

Other types of health insurance may cover more than just medical services, and you may need to purchase additional insurance plans to cover all of your needs. Those may include:

Types of health plans

Each health plan is different, but you can usually find a plan to cover preventive care, like doctor visits and screenings, as well as hospital visits, ER trips, and even prescription drugs. The different types of health plans include:
  • Health Maintenance Organization (HMO)
  • Point-of-Service (POS)
  • Preferred Provider Organization (PPO)
  • Fee For Service (FFS)
Some plans cover vision and dental, but you may need to purchase these plans separately.

What does health insurance cover?

Although the Affordable Care Act requires certain health benefits be covered in all health plans, every health insurance company is unique in what coverage they provide and how much those covered benefits cost. Use this guide to find out what’s covered in your health plan.
What is health insurance?
1 The word “care,” refers to the medical services covered by your plan. When you choose a plan, you will receive materials that explain your benefits so you know what types of services are covered.
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