About U.S. Healthcare

Let us remove the confusion from understanding Healthcare Coverage

In 2006, almost 43 million Americans had no health insurance, which translates into nearly 15 percent of the American population. This might be attributed to the fact that health care costs can be very expensive, and the cost of even the most basic care is steadily rising. Today, the amount Americans spend on health care is four times as much as the government spends on national defense. So it's no surprise that along with increased health care cost comes increased health insurance premiums. Employers typically bear the brunt of the expense for health insurance, but individuals are paying more and more each year as well. In 2006, employer insurance premiums increased 7.7 percent, twice the rate of inflation. The ACA has changed this percentage of non-insured, but there were unintentional consequences attached to the program.

Before deciding on an exact type of health insurance plan, it's important to know what kind of coverage is out there. While there are a lot of different ways to get health insurance, it's good to know what you may be eligible for before you start your health insurance search.

Group Health Insurance

The majority of people under the age of 65 have medical insurance through their employers' group insurance. According to the National Coalition on Health Care, in 2005, over 80 percent of employees were eligible for employer-group insurance and 83 percent of those who were offered, opted for these types of plans. This is usually because employers and other organizations can get better rates because they have a large number of people to cover. The insurance company sees it as good risk because they'll probably end up paying out very little for many people in the group, while collecting premiums from everyone. Normally, this translates into premiums that are much lower than those found in individual health insurance plans and are the same price for everyone in the group regardless of their health. However, networks are very critical for Group and Individual plans.

Before the days of managed-care health insurance plans, people had fee-for-service plans, or indemnity insurance. This type of plan offered you the freedom to go to any doctor you wanted. However, today's health insurance plans are dominated by the managed-care model found in HMO, PPO and POS plans. In these plans, the insurance company creates an entire list of doctors and facilities from which you have to choose. This list is known as the provider network -- it's composed of physicians, hospitals and other providers that offer health care services to members of that health insurance plan. So, how are these provider networks created?

Managed care plans typically involve three variations similar to FFS plans, the health maintenance organization (HMO), point of service (POS) plan and the preferred provider organization (PPO) plan. While some managed care plans can bear a close resemblance to an FFS plan, the focus of managed care is on preventive health care. The idea is that by allowing coverage for check ups and other preventative services, doctors can identify potentially serious illnesses early.

Managed care plans use networks of selected doctors, hospitals, clinics and other health care providers that have contracted with the plan to provide comprehensive health services to members at a reduced group rate. Because of this, managed care plans are usually more affordable than FFS plans for similar levels of coverage. In addition, by centralizing billing and administrative functions, networks can lower their overhead costs.