Commercial health insurance is offered by for-profit corporations and can be accessed through group or individual plans. Employers may offer group insurance plans and pay a percentage of the premium. Three common models include point of service, health maintenance organization, and fee-for-service. It’s important to carefully read the terms and ensure adequate coverage.
Also known as private health insurance, commercial health insurance is any type of health insurance that is not offered and administered by a government entity. The companies that sell this type of insurance are for-profit corporations and offer their insurance services through group insurance plans, as well as individual or personal plans. In all situations, commercial insurance of this type is available only to those who are willing to pay premiums in exchange for coverage.
Many people have access to commercial health insurance through an employer. Sometimes called group insurance, employees who meet employer criteria in terms of hours worked, time with the company and other factors can enroll in the program. Depending on how the insurance program is organized, the employer may absorb the full cost of each employee’s monthly premium, or pay a percentage of the total premium. When that is the case, the employee pays the remainder of the premium due through an employer-retained payroll deduction.
While there are several different formats for commercial health insurance, three models are the most common around the world. The most popular is known as a point of service plan. This type of insurance coverage allows the client to choose a primary care physician from the list provided by the insurance company. Using health professionals who are considered to be in-network ensures that the provider covers more of the medical expenses that qualify under the terms of the contract. If the client chooses to use a physician outside of the provider’s network, the benefits paid per medical incident are generally reduced.
Another popular option is known as a health maintenance organization, or HMO. As with the point-of-service approach, HMO participants choose a primary care physician from a list provided by the provider. To see a specialist, the primary care physician must officially refer the patient to that specialist. This type of plan rarely covers care provided by out-of-network health professionals, except in unusual circumstances.
Another option for commercial health insurance is the fee-for-service or indemnity model. This type of program covers a specific list of health care procedures. Clients can see any doctor or specialist they want, without any decrease in benefits. Plans of this type can be very narrow in scope, such as focusing on office visits and procedures that are performed in the doctor’s office. Other indemnity plans are more comprehensive and include coverage for hospital care related to the conditions listed in the contract provisions.
When evaluating any type of commercial health insurance, it’s important to make sure the plan provides adequate coverage. This means reading the terms carefully as they relate to routine checkups, outpatient procedures, hospitalizations, mental health treatment, and the amounts of all applicable deductibles and copayments. Also, many people will want to include long-term care insurance in their coverage, as this can help alleviate financial hardship during a prolonged illness.
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