Because of the extremely high costs of medical care, health
insurance is an absolute must. Most people who have medical
insurance acquire it through their employers. There are 3
varieties of medical insurance:
Indemnity plans. You either pay a deductible after which
the insurance company will pick up the tab, or you agree
to pay a portion (e.g., 10%) of all medical bills up to
a certain amount. These plans offer the most choices and
can be purchased individually or by a company as a group
benefit.
Health Maintenance Organizations (HMOs). These are networks
of medical personnel and facilities that provide medical
care on a prepaid basis. The 2 most common types are:
Group practice model: Hires or contracts with physicians
to provide medical services in a central facility.
Individual practice association: Contracts with individual
physicians to provide medical services in their own offices.
Preferred Provider Organizations (PPOs). Contracts a
network of doctors, hospitals, and other healthcare providers
who agree to treat members at special negotiated rates.
Meant as an educational tool, the Family Health Budget's web tool is free, easy, and helps take the guesswork out of budgeting for health care expenses. Plus, it helps consumers free up capital for other investments.
HSA – Health Savings Account
The newest entry into the world of health care acronyms is the HSA, or health savings account. An HSA is a tax-deductible account, which allows you to contribute funds that can be used tax-free to pay for qualified medical expenses, including your health plan deductible. Unused money rolls over year after year, allowing you to accumulate savings to cover future medical costs. These accounts are portable and can be taken with you should you leave one company for another.
Recommended Reading
All the information a consumer needs
to make intelligent insurance-buying decisions when
considering the variety and complexity of today's insurance
products.
