Many people have a fairly clear idea of what an insurance company is, even if they do not like them, when it comes to understanding most types of insurance such as auto, home or property insurance.
Health insurance is a different animal completely, in that health insurance is a much more complicated and complex arena.
Health insurance may well be offered by traditional insurance companies alongside other products such as auto/home insurance etc. There are also many specialist insurance companies who offer purely health insurance.
There are also associations/companies where the insurance company has a vested financial interest in the doctors/healthcare providers network.
There are also insurance companies who have financial interests in hospitals, either by owning them or having a controlling financial network in them. There are also what are known as self insured companies, which tend to be large commercial businesses who are effectively set aside a sum of money every year that they used to pay for their employees health insurance needs rather than pay it to an insurance company and then be reimbursed.
Captive Insurance Companies
This is often standard practice amongst very big commercial businesses who either set the money aside within their normal business, or sometimes set up their own insurance company, known as a captive insurance company, which is an in-house recipient of funds and insures the company’s employees at no cost to the employee themselves.
Understanding the complex area of health insurance companies can be important when trying to understand the levels of cost involved, both in terms of the cost the policyholder bears by way of what they pay as a premium and what they pay by way of deductibles and coinsurance amounts.
It can also be important to understand how health insurance companies work by way of how they offer benefits and the type of ink and out of network system of health care providers that they operate.
There is no question that way the system works perfectly is legal in the United States especially, but there are more questions about giving consumers a proper level of choice and accountability over which health care provider they can use and the level of cost that such a choice entails.
Health insurance companies that are completely independent of any healthcare provider such as a physician or hospital are likely to operate on a much more commercial basis by way of medical underwriting. This means that they will look at an individual situation by way of their health and charge them accordingly.
