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What Is Commercial Health Insurance?

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What Is Commercial Health Insurance?

What Is Commercial Health Insurance?

Health insurance that is owned and paid for by someone other than the government is known as Commercial Health Insurance. The major categories of Commercial health insurance include the Indemnity Insurance Coverage, Health Maintenance Organizations (HMOs), Point of Service Plans (POS) and the Preferred Provider Organizations (PPOs).

Commercial health insurance is also known as private health insurance. This kind of insurance could be in the form of group insurance, employer offered insurance or individual insurance. There is a wide variety of commercial health insurance available, unlike government health insurance which are limited by its standards. However, certain types of health insurance are not taken to be commercial health insurance. These are Medicare, Medicaid, Health Insurance programs for the Veterans, Children's Health Insurance Programs or CHIP and High Risk Pools of State.

Payment of Commercial Health Insurance

Payment made for Commercial Health Insurance could either be made fully by the employer or it could be on a sharing basis. There are some employers who offer health insurance that necessitates employees to pay the premiums, while the employers provide complete health insurance coverage. Again, in certain types of Commercial Health Insurance, the employees have to bear the cost of additional coverage. Further more, in some Commercial Health Insurance, the employees have to bear the complete cost of their coverage.

Laws and Regulations in Commercial Health Insurance

Commercial health insurance are regulated and governed by laws made by individual states. However, government plans differ among the different states, thus making Commercial health insurance regulations to vary among the states. It needs mentioning here that the laws meant for commercial health insurance of an employer are different from an individual health insurance.

Major Categories of Commercial Health Insurance

Commercial health insurance is available in different types which are unique in its coverage and flexibility. The different Commercial health insurance could be categorized into four major types. These are the Indemnity insurance coverage, Health Maintenance Organizations (HMOs), Point of Service Plans (POS) and the Preferred Provider Organizations (PPOs).

Indemnity insurance

Indemnity insurance is limited in its benefits and health related services. This type of health insurance provides fee-for-service coverage. The plan provides an individual the freedom to select their healthcare provider, though the services and costs involved are limited by that offered by the plan. There are however certain indemnity insurance coverage that provide comprehensive health services.

Health Maintenance Organizations (HMOs)

The Health Maintenance Organizations (HMOs) on the other hand provides a fixed set of services and the individual needs to select a “Primary Care Provider” under whom he or she will be in charge of their healthcare. To see a doctor or some specialist, the individual is required to be referred by the Primary Care Provider. The HMO has a list of providers from which the client has to select their healthcare. The HMO also provides the list of specialists. The individual has to pay a small amount as co-payments for each of their visits to the health care provider.

Point of Service Plans (POS)

Individuals going for Point of Service Plans also need to select their primary care provider (PCP) from the available list. However, the individual has the freedom to see other health care professional who are not on the list of providers (also called out-of-network).The individual in this case has to bear a higher cost to see providers who are not on the list of providers. There are deductibles if an individual has paid an amount before there has been any coverage of costs by the health insurance. In the case where any professional within the list is approached for healthcare, the individual needs to pay a small co-payment.

Preferred Provider Organizations (PPOs)

If an individual goes for Preferred Provider Organizations (PPOs), he or she can see any doctor and healthcare professional from a list at reduced price. In case, the individual visits a professional outside the list, then a large portion of the total medical cost involved has to be borne by him or her. The individual however, is not required to select any primary care provider.

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