Health insurance is a financial arrangement where a company or association pays for future health care needs of its members. The benefit may be in the form of reimbursement for services covered under the plan, direct payment for covered services, access to discounted rates on healthcare provided outside of the plan or some combination thereof. Health insurance can also reimburse you for expenses already incurred.

Types of health insurance:

There are different ways how people choose to pay their medical bills and obtain coverage. Here are some common forms:

1. Preferred Provider Organization (PPO): A preferred provider organization requires that insureds use providers within a specific network in order to receive maximum benefits. PPO policies usually offer more flexibility but typically have higher monthly premiums than HMOs.
2. Health Maintenance Organization (HMO): An HMO requires that insureds use providers within a specific network in order to receive maximum benefits. Some HMO plans require that the insured see a primary care physician for a referral before seeing a specialist.
3. Point of Service (POS): POS works just like an HMO, except that if you want to see a specialist, you don’t need a referral from your primary care physician first.
4. Exclusive Provider Organization (EPO): This is similar to PPO in terms of flexibility but with less coverage. With an EPO plan, members are required to use doctors only in the EPO’s network in order to get coverage for their medical bills. If they see a doctor outside of the EPO’s network, they cannot get reimbursed. Also known as ‘closed panel’.
5. Indemnity plan: This type of plan does not require members to use specific providers. Rather, it allows them to go outside the network for care and coverage will depend on the benefits that are purchased with the individual policy. No referrals are needed for out-of-network care.
6. Personal Injury Insurance: This indemnity-type coverage is designed to protect you when you are responsible for causing injury to someone in an accident. It typically covers legal fees, court costs and any damages awarded by the judge or jury. If there isn’t enough money collected from the responsible party to cover these expenses, then the insurer pays the rest. This type of insurance is usually purchased by professionals who frequently deal with personal injury cases, such as doctors, lawyers and private investigators.
7. Dental Insurance: Typically offered as a separate policy rather than part of medical insurance; often only covers preventative services like x-rays and cleanings but not dental surgery or other major procedures. You may be able to purchase a rider to your health insurance policy that will cover dental procedures.
8. Vision Insurance: Typically offered as a separate policy rather than part of medical insurance; covers services like eye exams, prescription glasses and contact lenses. You may be able to purchase a rider to your health insurance policy that will cover vision procedures.
9. Critical Illness Insurance: Covers you for one or more critical illnesses such as cancer, heart attack and stroke. Provides a lump sum payment which can be used however the individual sees fit, such as paying off debts or covering living expenses while ill.
10. Long-Term Care Insurance: Covers the costs of long-term care services which are not typically covered by regular health insurance policies, such as nursing home care, home health care and adult daycare.
11. Disability Insurance: Covers you in the event that you become disabled and are unable to work. This type of insurance can help pay for things like lost income, medical bills and rehabilitation expenses.