Actual health insurance to cover sickness began around 1890. Hospitals started their own health insurance plans in the 1920s and a teacher’s group in Texas created group health insurance in 1929.
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The nonprofit Blue Cross began in the early 1930s and actual health insurance companies beginning in the 1930s and 1940s. Only in 1965, did Medicare and Medicaid become a reality. Health insurance has evolved greatly since its beginning. There are now a large number of health insurance companies offering coverage in the United States.
What is health insurance?
Health insurance is simply a plan whereby you pay a premium to an insurance company in order to transfer the risk of the cost of health care to a third party. Essentially the insurer estimates how much a particular group will cost in health care expenses.
Premiums are charged to the members of the group to more than cover these expenses. For the insured, it brings peace of mind that another party will take care of big bills.
A health insurance policy typically covers serious, sudden illness or injury that needs emergency care. It also covers preventative medicine, hospitalization, prescription medication, and routine health care procedures. However, certain policies do not cover all these things.
How do health insurance companies differ from one another?
Not all health insurance companies are created equally. In fact, companies differ based on the types of plans they offer. Companies that offer just HMOs are much different than those who offer other types of plans such as PPOs, POS and traditional indemnity health insurance.
They also vary based on the type of private health care coverage they offer, such as employer sponsored, individual health insurance, or high risk health insurance. Amongst the other differences between health insurance companies are their size, the number of states they operate in, their financial strength, and customer service.
What should I look for in a health insurance company?
It is very important to do your homework when looking for a health insurance company. Picking the wrong one can be very costly. Be sure to select a company that you can trust.
You need a health insurance company that has a good reputation with its customers, offers a plan that suits you, and is financially sound. Luckily there are resources out there to help you find out such information.
To find out about the kind of service a health insurance company offers, check out consumer watchdog websites like the Better Business Bureau. It will give you an idea of how trustworthy an insurer is.
To learn about how customers feel about a specific health insurance company, do a search for reviews or complaints about the company by name online. You will likely find an abundance of information. Bear in mind that customers are typically more vocal when disappointed; however, if a majority of customers give the same negative information, be wary.
To be sure that a company has the right plan for you, it is important to make sure you understand which options are on the market and which ones suit you best. If you know what you are looking for, you will have a much better chance of getting it. Shop around for the type of coverage you want. Be sure to read the fine print on any policy before you commit to it.
If you want to find out about the financial status of an insurer, be sure to seek out an independent insurance rating company, such as A.M. Best. Other well-known and respected ratings companies include Standard & Poor’s, Moody’s and Weiss Ratings.
All these companies assign letter grades which indicate if the insurer is living up to its present and future obligations and the kind of financial outlook it has. You should never take out any type of insurance policy without first checking at least one of these ratings.
In order to find the perfect health insurance company to meet your needs, take the time to shop around. Compare as many insurance companies as you can.
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