Also known as private health insurance, commercial health insurance is any kind of health insurance that it is not offered and managed by a public authority. Commercial health insurance companies are for-profit companies, and offer their insurance services through group insurance plans as well as individual or personal plans. In all situations, a commercial insurance of this type is only available to those who are willing to pay premiums in return for coverage.
Commercial health insurance through an employer
Many people have access to commercial health insurance through an employer. Sometimes referred to as group insurance, employees who meet the employer’s criteria in terms of working hours, time with the company, and other factors may be enrolled in the program. Depending on how the insurance program is arranged, the employer can absorb the total cost of the monthly premium for each employee, or pay a percentage of the total premium. If so, the employee pays for the remainder of that premium through a payroll deduction deducted by the employer.
While there are a number of different formats for commercial health insurance, three models are the most common around the world. The most popular are called a Point of Service plan. This type of insurance coverage allows the customer to choose a primary care physician from the list as an insurance carrier. The use of healthcare professionals who are considered to be in-network ensures that the provider covers a greater proportion of any medical expenses that meet the conditions of the contract. If the customer chooses to utilize a doctor outside of the network, the benefits paid per medical event are usually reduced.
Health maintenance organization
Another popular option is known as health maintenance organization, or HMO. As with the Point of Service approach, participants in an HMO select a primary care physician from a list provided by the provider. To see a specialist, the primary care physician must officially refer the patient to the specialist. This type of plan rarely covers medical treatment by healthcare professionals outside the network, except in exceptional circumstances.
Another option for commercial health insurance is the fee-for-service or replacement model. This type of program covers a specific list of healthcare procedures. Customers can see any doctor or specialist they want without any decrease in benefits. Plans of this type can be very limited in scope, focusing on office visits and procedures done in the doctor’s office. Other reimbursement plans are more comprehensive and include coverage for hospital care related to the conditions set out in the contract terms.
When assessing any type of commercial health insurance
It is important to ensure that the plan provides adequate coverage. That means reading the terms thoroughly as they were related to routine inspections, outpatient procedures, hospital stays, mental health treatments, and the amount of all applicable deductibles and co-payments. In addition, many people want to include long-term care insurance in coverage, as this can help alleviate financial problems during an extended illness.