Historically in the US, Health Maintenance Organizations preferred using the name “Health Plan,” whilst insurance firms preferred the name “Health Insurance”. A health plan is a medical care arrangement offered by Health Maintenance Organizations through the payment of a fixed subscription. Preferred Provider Organizations and/or Point of Service Plans are also similar to pre-paid legal services and pre-paid dental plans. In a pre-paid health plan, you pay for a certain plan at a fixed rate for a fixed number of services. Say for example $200 for preventive care, care given from skilled nurses, and a certain number of days in hospital care.
Comprehensive Versus Scheduled
With Comprehensive Insurance, the insurer pays a certain percentage for the cost of a physician and the hospital after deductibles and this mainly applies to hospital and physician charges. There are however certain conditions to be met for the insurer to pay that percentage which is usually 80% of the total cost or depending to the policy agreement. This plan is generally expensive, but it comes along with high payouts. Payouts can be up to as much as between $1,000,000 and $5,000,000.
Scheduled plans are more of basic policy plans that offer coverage for daily health care needs such as visiting the doctor and or getting prescribed drugs. Of late scheduled plans are known more as “Association Plans” because they require being members of an association that does not deal only in insurance, but also in other entities. An example of such an organisation is the Health Care Credit Union Association and these Comprehensive plans offer coverage for instances such as hospitalisation and or surgery. Scheduled plans are however limited to some extent and they do not offer coverage to catastrophic events that may happen to the policy holder. These plans cost a lot cheaper than Comprehensive plans and in the event of payouts, they pay directly to the health provider. Payment benefits are based on the plan’s program and benefits may range between $1,000 and $25,000 yearly.
Factors affecting Health Insurance prices
In a recently conducted study by an independent source, it was revealed that the ever increasing cost of Health Insurance is because of the increase in utilisation and demand. More and more consumers are in need of Health Insurance and factors such as newer medical technologies and more diagnostic testing have caused an increase in demand. In developed countries people tend to live longer and that has contributed to an increase in the aging population and therefore a need in medical care. Increased medical research and technology generally causes the cost of medical treatment to increase significantly. Lifestyle habits also do contribute to an increase in the cost of medical treatment, obesity is on the increase, so are cases of cancer and all these give a rise to medical treatment and in turn gives rise to Health Insurance. Other factors noted by this independent study were that an increase in drug and alcohol abuse has led to the need of medical treatment.