As much as health insurance can be an effectively good plan, we have been able to discover the disadvantages of health insurance that will keep your mouth open for a long time. Health insurance, to many, is like winning a jackpot. Yet, even if it has its silver lining, our focus is still to reveal the dark sides that are unknowingly pointable about the project.
This plan is a type of insurance that covers the whole or a part of the risk of a person incurring medical expenses. As with other types of insurance, risk is shared among many individuals. Although it comes with the agreement which is reached by both parties, that is, the employer and the employee, health insurance has a way of pretending it is not some very serious risk that needs to be avoided.
Types of Health Insurance
In spite of having some negative features, health insurance has been able to grow by leaps and bounds and has even categorized itself into types. Below are some of the different kinds of plans in which it comes to us.
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Private Health Insurance
The Centers for Disease Control and Prevention (CDC) say that the U.S. healthcare system relies heavily on private health insurance. In the National Health Interview Survey, researchers found that 63.7%Trusted Source of people under the age of 65 years in the U.S. have a type of private health insurance coverage.
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Public, or Government Health Insurance
With this type of insurance, the state subsidizes healthcare in exchange for a premium. Medicare, Medicaid, the Veterans Health Administration, and the Indian Health Service are examples of public health insurance in the U.S.
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Managed Care
With this type of plan, the insurer will have contracts with a network of providers to provide lower cost medical care to its policyholders. There will be penalties and additional costs added to out-of-network hospitals and clinics, but they will provide some treatment.
The more expensive the policy, the more flexible it is likely to be with the network of hospitals.
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Indemnity, or Fee-for-Service
A Fee-for-Service plan covers treatment equally among all providers, allowing the insured to choose their preferred place of treatment. The insurer will typically pay 80% of costs on an indemnity plan, while the individual pays the remaining costs as a coinsurance.
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Health Maintenance Organization
These are organizations that provide medical care directly to the insured. The policy will usually have a dedicated primary care physician who will coordinate all necessary care.
Health Maintenance Organization (HMO) plans will usually only fund treatment referred by a family doctor and will have negotiated fees for each medical service to minimize costs. This is usually the cheapest type of plan.
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Preferred Provider Organization
A Preferred Provider Organization (PPO) plan is similar to an indemnity plan in that it allows the insured to visit any doctor they prefer. The PPO plan also has a network of approved providers with which it has negotiated costs.
The insurer will pay less for treatment with out-of-network providers. However, people with a PPO plan can self-refer to specialists without having to visit a primary care physician.
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Point-of-Service
A Point-of-Service plan functions as a combination of an HMO plan and a PPO plan. The insured can choose between coordinating all treatment through a primary care physician, receiving treatment within the insurer’s provider network, and using non-network providers. The type of plan they have will dictate the progress of treatment.
Read Also: Why Health Insurance is Important
Disadvantages of Health Insurance
Like I said earlier, health insurance has its very obvious dark sides only that it keeps them covered and disguised by glittering more with some benefits that make you think it is life-saving by standards of its policy. However, it is not the angel that you think it is as it has its ugly effects too. Here are the demerits or disadvantages of health insurance in your neighborhood:
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Increase In Premiums
The premiums of your Health insurance policy mostly depend upon your age. There can be a significant difference in the premium amount when you purchase a health policy when you are 30 years old and when you buy one after crossing 50 years.
The insurers get increased risk by charging a higher premium. This is the reason why it is said that you should purchase health insurance when you are young.
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Pre-Existing Exclusion
Another disadvantage would involve people who have pre-existing diseases. They have to undergo a waiting period which is typically four years. Insurers typically require you need to wait for four years for any pre-existing illness to be covered.
This becomes a major obstacle for older individuals with pre-existing medical conditions. This is particularly so because pre-existing illnesses don’t only include illnesses you may have received treatment for in the recent past. It includes illnesses for which there were signs or symptoms in the 48 months prior to the payment of the first premium.
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Lacks Full Family Coverage
Many group insurance plans do not cover the family members. It is one of the significant disadvantages of corporate health insurance. In other cases, the health insurance benefits are only limited to the spouse and not the parents. For many sole breadwinners of the family with dependent children and parents, corporate health insurances are not the best health insurance. If you are in such situations, it is better to look for individual health insurance plans.
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Waiting Period
In the Waiting period you must wait for a specified amount of time before you make a claim. But you cannot claim some or all benefits of the health insurance from your company. The initial waiting period or 30 day waiting period is the time where the customer has to wait before making a claim under the health insurance policy.
