Understanding the Basics of Health-Care Coverage

Health insurance coverage is more important than ever before in providing your family with the health security they require in the event of an emergency. Medication, doctor consultations, hospitalization, and hospital stays are all covered by decent health insurance. Diagnostic and treatment procedures may be covered by some health insurance plans.

There are several basic health insurance coverages plans to consider. In a managed care plan the insurance company offers its own doctors and hospital affiliations. The disadvantage of managed care health insurance coverage is that you're often required to pay an additional fee should you prefer to visit your own doctor or be admitted to the hospital of your choice.

A fee-for-service plan is a type of health insurance in which the firm and the insured split the cost of doctor and hospital bills. The insured pays a monthly premium to the insurance company, and the insurance company pays a percentage of the doctor and hospital bills. Fee-for-service plans can cover either basic or major medical needs. A basic fee-for-service plan includes the hospital room and care, as well as some extra hospital services like x-rays and prescriptions. The cost of surgery and some doctor visits are also covered under basic coverage. Long-term care and major disease are covered under a large medical fee-for-service plan.

The Health Maintenance Organization plan, sometimes known as an HMO, is the next option. Providers under contract with the HMO provide services such as doctor's visits, hospital stays, surgery, diagnostic testing, and so on. As a result, the insured rarely has the option of choosing his or her own doctors or hospitals. In most circumstances, the insured is allocated to a primary care physician and must go via this provider in order to be referred to other doctors or specialists (who, in most cases, are also contracted with the HMO).

Medicare is a national health insurance program for people 65 years of age and older, certain younger disabled people, and people with permanent kidney failure. Medicare is divided into two parts: Hospital Insurance (Part A) and Medical Insurance (Part B). Part A helps pay for care in a hospital and a skilled nursing facility, and for home health and hospital care. Part B helps pay doctor bills, and for outpatient hospital care and other medical services not covered by Part A. You do not have to pay a monthly premium for Part A if you or your spouse worked for at least 10 years in Medicare-covered employment, and you are 65 years old and a citizen or permanent resident of the United States. Everyone who enrolls in Medicare Part B must pay a premium.

COBRA isn't a health insurance plan; rather, it's a government initiative designed to safeguard people from losing their health coverage in certain circumstances. The Consolidated Omnibus Budget Reconciliation Act (COBRA), which was passed in 1986, mandates that most group health plans give a temporary continuance of coverage that would otherwise be canceled. Death of a covered employee, termination or reduction in hours of employment for reasons other than gross misconduct, divorce or legal separation from a covered employee, a covered employee's becoming eligible for Medicare, and a child's loss of dependent status (and thus the coverage) under the plan are all covered by COBRA.COBRA generally applies to all group health plans maintained by private-sector employers (with at least 20 employees) or by state and local governments. The law does not apply to plans sponsored by the Federal government or by churches and certain church-related organizations.