Types of Health Insurance

While the differences between health insurance plans can be found only by careful reading of coverage documents, here is a general guide to the different types of major medical insurance available.

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Group health insurance

One of the most common ways to obtain health insurance is through a group plan, such as that offered by an employer to its employees. The most attractive feature of employer-sponsored group health insurance is that the employer usually pays at least a portion, and often the majority, of the premium. The total premium amount charged to the group is based on the age, gender, health status, and occupation of the individuals making up the group. Usually group plans must accept all qualified applicants, regardless of health status or pre-existing conditions, and generally enrollees are not asked for proof of insurability.

Some employers, particularly larger employers, offer several different group health plans, instructing each employee to choose the plan that best fits his or her individual needs and budget.

In addition to employer-sponsored group health plans, sometimes one can purchase group health insurance through a labor union, professional organization, or trade association.

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Temporary health insurance

For people who are between permanent health insurance plans and recognize the need to protect themselves from the often disastrous financial consequences of unforeseen illness and injury, temporary health insurance is a smart option. Temporary health insurance provides major medical coverage for a time period specified by the buyer, typically 30 to 365 days (plans vary by state).

Temporary health insurance generally is affordable and easy to obtain. Customers often can secure coverage as early as the day after they apply. Since temporary health insurance is designed to provide reliable protection from unforeseen illnesses and accidents, it will not cover preventive care or treatment of conditions that were present before the policy began.

Individual medical insurance

Self-employed individuals and others who cannot take advantage of employer-sponsored group health insurance usually opt for an individual medical insurance policy. When applying for an individual medical plan, customers have the flexibility to choose any plan from any company that suits their needs, and individual medical plans usually offer many options for tailoring coverage and adjusting the price.

When applying for an individual medical plan, acceptance and cost are dependent upon the applicant's health history and status. Insurers may deny coverage to certain individuals, or they may exclude certain conditions from coverage under the policy.

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