| If
you recall, we explained that there are two broad categories of health
insurance
policies: disability and medical expense. Thus
far we have covered disability. Now
we’ll take a look at basic
medical expense insurance.
Basic
medical expense policies provide for medical expenses that result from
accidents
and sickness.
This is a loose term that refers to various
medical, hospital and
surgical benefits.
The
broad category of medical expense coverage provides a wide range of
benefits for
hospital, surgical and medical care. Other benefits may apply
as well,
such as private nurses, convalescent care, and more.
Policies
may be written as such that they may be limited to only one or two
types of
coverage like hospital or miscellaneous medical costs or surgical
expenses.
These are known as basic plans.
Other,
more broadly written, policies may cover all expenses resulting from
accident or
illness using some specific exceptions.
Medical
plans include fee-for-service wherein doctors and other providers
receive a
payment that does not exceed their billed charge for service provided.
Prepaid
plans provide medical or hospital benefits in the form of service
rather than
dollars. Many things need to be considered when selecting a
medical
expense plan such as:
Specified
coverage versus comprehensive care. In other words does the
plan feature
only specific benefits or is the coverage comprehensive?
Any
provider versus a limited number of providers. Are you
required to choose
from a specific list of providers?
National
versus regional operation. Is the plan limited to a specific
geographical
region or operate nationwide?
Insured
versus subscribers. Are participants considered insureds (the
person who
receives the benefit) or subscribers
(the person who is paying the premium)?
We
are going to take a look at the limited coverage for hospital, medical
and
surgical expenses. Discussing this separately first, will
help you to
understand how the components are combined in major medical and
comprehensive
policies.
The
broad definition of basic medical expense insurance in most states
includes
hospital, medical and surgical expenses. The purpose of this
type of
insurance is to cover a broad range of medical, hospital and surgical
expenses
as well as separate categories of medical expenses.
Let’s
explore individual versus group coverage.
No
matter how a policy is written, narrowly or broadly, medical expense
insurance
is designed to reimburse for the cost of care whether it results from
injury or
illness.
Both
individual and group policies are available to consumers. Normally
individual policies are more costly
along with having limited
benefits but generally speaking, both types cover the same medical
services.
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