Personal medical coverage offers benefits for medical care. Some policies may provide for payment of health charges incurred on a reimbursement basis by paying benefits to the policy owner, payment on a service basis by paying those who supply the services directly, or payment of an indemnity by paying a prearranged amount regardless of the total charged for health visits. Health expenses or hospitalization insurance may be written on an individual or group basis.
While there are several types of benefits offered, private health expense insurance can generally be categorized as basic medical expense insurance, major medical insurance, comprehensive medical coverage, and special policies. Most of these policies have mainly been replaced by managed care options and are no longer offered as stand-alone plans. These types of plans have been adapted and replaced in answer to changes in the health care field relative to cost containment and market competition. Help for prescriptions might also be included.
Basic health care insurance provided by a private medical expense plan includes hospital expense, surgical expense and medical expense. These 3 basics could be sold as one or individually. Normally this is written as “first dollar” insurance, which means it does not include a deductible.
Like the name implies, hospital expense health care insurance provides benefits for charges incurred during hospitalization. Hospital indemnities are customarily classified into 2 general groups:
Room and board, as well as nursing care and special diets
Miscellaneous medical charges, as well as x-rays, laboratory fees, medications, medical supplies, and operating and treatment rooms
In some cases, surgical benefits may perhaps be incorporated for certain types of surgery and associated costs. Hospital expense insurance offers benefits for daily hospital room and board and miscellaneous hospital expenses whilst the insured person is confined to the hospital. The plan might provide for a certain dollar amount for the daily hospital room and board benefit, even though the trend is toward insurance of not more than the semiprivate room rate unless a private room is medically required. The room and board benefit could be paid on either an indemnity basis or a reimbursement basis, depending on the individual policy.
Indemnity programs are every now and then called dollar amount policies. Room and board rates differ by geographic location, however it is not uncommon to find room and board rates ranging from $300 to $650 per day or more.
Usually, the maximum number of days is from 50 to 600 . More commonly, room and board charges are paid on a reimbursement basis. This is also referred to as an expenses-incurred basis. Under this policy, the health insurance will reimburse in one of two methods.
The actual bills for a semiprivate room are covered.
A percentage of the actual fee is paid, with no explicit dollar limit.
Under the first reimbursement option, the health insurance company will pay the full actual semiprivate room rate, regardless of what it is. Under the second reimbursement option, the medical insurance company pays a specified percentage, regardless of what the actual charges are. A usual percentage is 80%. Frequently there will be a prescription assistance program attached to the plan.
To recap, under the actual expenses style of reimbursement plan, the insurance will pay the actual amount charged for a semiprivate room without regard to a specific dollar limit. Under the percentage type of reimbursement plan, the policy will pay a specified percentage of the actual charges.