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Identifying and Understanding the Variance Between Private Vs. Public Health Insurance

The government provides public health care through national health care systems while self-employed practitioners and non-profit government providers offer individual health.

Private health care is provided through insurance plans where enrollees sign up for different covers at a premium charge usually higher than state-run insurance plans. It is the kind of insurance provided by employers and other organizations.

Emplyee Health Insurance

Depending on the company’s resources, it may offer one or several types of health insurance covers. However, some employees may prefer signing up for their covers instead of getting a plan through their employer. Such programs cost higher as the employee foots the entire bill instead of sharing it with the company. Some private insurance plans work with particular health care facilities and providers that are part of the insurance plan to provide affordable care; a program called managed care. We will discuss the various kinds of managed care plans. First, we need to discuss the difference between public health insurance and private health insurance. The reason is that some clients confuse the two and do not fully understand what they are buying. That happens a lot when the person does not fully understand their needs. You can make a more informed insurance choice when you understand what your needs are.

Public Health Insurance

These are state-run programs. Your employer gives you a list of health insurance programs the company offers. You go down the list and pick the one that best fits you and your family’s needs. The best part is you get the plan at a discount because your employer is paying more than half of what you are expected to pay. Your employer is essentially “picking up the tab”. You are only responsible for the “tip.”

Private Health Insurance

These programs are privatized because you are paying your way. You might be offered a different kind of package, but they are, essentially, the same kind of program that an employer gives his employee. These programs are geared more towards those who are self-employed and other small governmental programs.

The Cost

You are going to pay a higher premium for private health programs. The reason is that it costs more when you represent yourself. Employers pay the higher cost when they cover your expenses. They pay 80% and you pay the 20%. That is the way it works when you are employed by someone else. However, when you are self-employed you are paying for everything.

Preferred Provider Organization & Indemnity plans

The program allows clients to pay less if they use providers within the plan’s network as it pays most of the medical costs. However, clients visiting hospitals, doctors, or providers outside the network without referrals pay an additional charge. Private health insurance plans not listed under the managed care plans are called indemnity. Indemnity enrollees are not restricted as to their choice of doctors or medical facilities. The health care provider receives a fee each time you receive medical care covered by the plan.

Health Maintenance Organization

The insurance plan only takes care of medical assistance expenses within a particular network of health providers. It is an organization that provides managed care for self-funded health care plans, health insurance, individuals, and other entities working together with healthcare providers on a pre-paid basis. As such, the policy limits coverage to care from doctors who have entered in contact with the HMO and only provides out-of-network care during an emergency. The HMO plan also requires subjects to work or live within the service area to qualify for coverage. Most such plans focus on integrated care, as well as prevention and wellness.

Point of Service & Exclusive Provider Organization

The program combines characteristics of the preferred provider organization and the health maintenance organization. The POS plan provides lower medical costs to its clients but offers a limited choice. Enrollees who have signed up for the program are required to choose a primary health care provider from within the network, which becomes a Point of Service. The primary health care provider can make referrals to facilities outside the network where the medical insurance plan offers little compensation. The required paperwork during medical visits within the healthcare network is completed on behalf of the patient. However, if the patient visits facilities outside the network, it is his responsibility to fill out the paperwork and send all the bills for payment. It is another managed care plan where medical services are covered under the plan only if the client visits a doctor, specialist, or a hospital within the plan’s network.

Medicaid

Is a state-run health insurance plan with a primary focus on people with low income. The program also covers older people, expectant women, and those with a disability. Rules about those eligible for the plan and the kind of services provided vary from one state to another. Medicaid pays the health care provider, but enrollees are required to pay a small amount for particular health services. This insurance is state-run. It focuses on people who are in the low-income bracket. My sister has this insurance. It saves her a lot of money each month, especially when you consider how much she sees her doctors each month. Medicaid saves her at least 80% on everything, including her prescription drugs. You can qualify for a number of reasons, including disability, being an expectant mother, and older people( like my sister). Every state has its rules about this program. What we face here in Florida might be different compared to what you face. Talk to your doctor before signing up. You want to make sure you get the right coverage.

Medicare

This is another state-run insurance company that focuses on people 65 and older. You can get covered if you have organ failure(like a kidney), a disability, or other diseases. Getting older is hard. Medicare tries to make it easier. It is divided into four parts:

  • Part A helps cover care in particular medical facilities like hospitals and nursing facilities
  • Part B helps pay for health care providers and special outpatient care. It may cover services not included in Part A plans like some physical therapy and home health care
  • Part C is going to cover everything that A, B, and D do not cover. It is similar to an addendum on a contract. It takes care of any extras that might come up. Do you have a plan similar to an HMO or a PPO? That is considered Part C of the Medicare plan. You can order drugs you might normally be able to get through this coverage. You get a card and save money through a lot of discounts.

In-Network Versus Out-of-Network

Public health programs offer both, but staying inside the network is going to be a lot cheaper for you. That is why you should try to choose a doctor that is on their list. Customers who choose to go outside the network are going to be paying 2-3 times more. Whereas Private healthcare offers only one option, which is out-of-network. The private companies are always going to be more expensive because of how private they are.

What is the difference between a PPO and an HMO?

The main difference lies in your choice of doctor and the number of visits you can have a year. You can qualify for the maximum number of visits and care your doctor provides, but you need to see someone in the network for that to apply.

HMO

You need to see your Primary Care Physician(PCP) first. They can refer you to a specialist as needed. You need to go to the doctor they refer, or you might not get in. Are you thinking about going out-of-network? You foot the bill. They do not pay for anything. It could mean the difference between paying $250 or $5,000 for a visit. Something for you to keep in mind.

PPO

You have fewer limitations with this plan. You can see a specialist without having to see your PCP first. You can also go out-of-network if you prefer. However, your benefits are going to be better if you stay inside the lane. You usually have a deductible, but that may vary with each plan. The one downside is that your premiums are going to be higher.