Introduction

This guide briefly describes the different kinds of health insurance plans available today, including:

• Network-based plans.
• Non-network based coverage.
• Consumer-directed health plans.

You will find answers to many common questions you may have about health insurance. Resources are provided to help you find additional, more detailed information.

There is also a Glossary of health insurance terms. Terms defined in the Glossary are in bold and linked the first time they appear in the guide.

Changes and Choices

Today, there are many more kinds of health insurance to choose from than were available just a few years ago. Traditional differences between and among plans may no longer apply. Also, there is an increased emphasis on the role of consumers in managing their own health care and health care finances. There is a focus on providing information on the cost of care and health care quality—at the level of the physician, physician group, and hospital—to help consumers and employers choose among the many options available to them.

A New Health Care Marketplace

Things have changed a lot since the 1970s, when most people in the United States who had health insurance had indemnity insurance. Indemnity insurance is often called fee-for-service or traditional health insurance. This type of coverage generally assumes that the medical provider (usually a doctor or hospital) will be paid a fee for each service provided to the patient—that is, you or a family member covered under the policy.

With fee-for-service insurance, you go to the doctor of your choice, and you submit a claim to the insurance company for reimbursement. Often, your doctor or hospital will submit the claim for you. You will only be reimbursed for "covered" medical expenses; that is, the covered services listed in your plan's benefits summary.

When a service is covered under your policy, you can expect to be reimbursed for some—but generally not all—of the cost. How much you will receive depends on your policy's coinsurance and deductibles. You will be responsible for the portion of the bill not reimbursed by the insurance company. Go to the section on Indemnity Insurance for more information on coinsurance and deductibles.

Today, many Americans who have health insurance are enrolled in a managed care plan, such as a health maintenance organization (HMO) or a preferred provider organization (PPO). For more information on HMOs and PPOs, go to the section on managed care.

When we talk about health insurance, we usually mean the kind of insurance that pays medical bills, hospital bills, and typically, prescription drug costs. This type of coverage includes Medicare and Medicaid, two government programs that provide health insurance coverage for certain populations, such as seniors, people with disabilities, and individuals and families with low income. But there are other types of coverage as well, including disability insurance, long-term care insurance, and other coverage that can offer additional financial protection for you and your family. Information on these types of plans is provided later in this guide.

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