Historically, in the US, Health Maintenance Organizations preferred to use the name “Health Plan”, while insurance companies preferred the name “Health Insurance”. A health plan is a health care arrangement offered by Health Maintenance Organizations for the payment of a fixed subscription. Preferred provider organizations and/or point-of-service plans are also similar to prepaid legal services and prepaid dental plans. In a prepaid health plan, you pay a certain plan at a fixed rate for a fixed number of services. Say, for example, $200 for preventive care, skilled nursing care, and a certain number of days in hospital care.
Comprehensive Versus Scheduled
With Comprehensive Insurance, the insurer pays a certain percentage of the cost of a doctor and hospital after deductibles and this applies primarily to doctor and hospital charges. However, there are certain conditions that must be met for the insurer to pay that percentage, which is usually 80% of the total cost or according to the policy contract. This plan is generally expensive, but it comes with high payments. Payments can be up to $1,000,000 and $5,000,000.
Scheduled plans are more basic policy plans that offer coverage for everyday health care needs, like doctor visits and prescription drugs. The latest scheduled plans are more commonly known as “Association Plans” because they require membership in an association that deals not only with insurance, but with other entities as well. An example of such an organization is the Association of Health Care Credit Unions and these comprehensive plans offer coverage for instances such as hospitalization or surgery. However, scheduled plans are limited to a certain extent and do not offer coverage for catastrophic events that may befall the policyholder. These plans are much cheaper than comprehensive plans and, in case of payments, they pay directly to the health provider. Payment benefits are based on the plan schedule and benefits can range from $1,000 to $25,000 per year.
Factors Affecting Health Insurance Prices
In a recent study by an independent source, it was revealed that the rising cost of health insurance is due to increased use and demand. More and more consumers need health insurance, and factors such as newer medical technologies and more diagnostic tests have caused an increase in demand. In developed countries, people tend to live longer and that has contributed to an increase in the aging of the population and therefore a need for health care. The increase in medical research and technology generally causes the cost of medical treatment to rise significantly. Lifestyle habits also contribute to the increase in the cost of medical treatments, obesity is on the rise, also cancer cases and all this gives rise to medical treatments 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 for medical treatment.