The term health insurance plans relates to health insurance policies, that are commonly referred to as health insurance plans, and may either be taken out by an individual as a specific insurance policy, or by an employer on behalf of an individual.
If an individual takes out a health insurance plan or health insurance policy, it works pretty much the same way as if they would take out insurance on their home or their car.
If the employer takes out a health insurance plan on behalf of an employee, then common practice is that the employer pays the premium, and the employee will pay additional costs such as deductibles and any co-pay payments.
The nature of health insurance plans is that they differ in one or two fundamental respects from most other types of insurance policies.
Whilst the principal is the same, in that an individual or an employer pays a premium by way of their side of the contract, and the insurance company agrees to indemnify the individual or employer by way of financial benefits, the insurance company has a much greater say in what can and cannot be claimed under the terms of the policy.
Medical Interventions
The insurance company will require an individual to notify them of any proposed medical intervention or procedure that they intend to carry out, and to seek the insurance company’s approval prior to any such medical intervention taking place.
This is known in health insurance jargon as prior authorisation. In addition, the insurance company has the right under the terms of the contract to decide whether any proposed work of a medical nature is deemed to be medically necessary or not.
In practice, the insurance company also has a network of its own healthcare professionals that it requires the policyholder to use for any medical intervention or diagnostic services that may be required.
This in reality gives the insurance company a huge amount of power to decide whether or not an individual policyholder can make a claim under the policy, and which healthcare provider they can use for any hospital care or primary care that they may wish or need to undertake.
All health insurance plans work on this basis, and are specifically designed to give the insurance companies some level of control over costs, both in terms of the type and level of claims that an individual can make under the policy, and also levels of cost that health care providers, including hospitals, can charge to the insurance company.
The downside for an individual, is that it is effectively the insurance company determining whether or not an individual needs medical intervention or help, not the individual themselves or even their physician or other healthcare provider. This can give rise to serious problems.
