Commercial Health Insurance
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Commercial Health Insurance
Commercial health insurance, otherwise known as private health insurance, is any health insurance that is not owned or operated by the government. Commercial health insurance can include insurance through any group, employer or insurance purchased by an individual. Government health insurance covers certain standards, but commercial health insurance can vary drastically in coverage and price. Types of health insurance NOT considered to be commercial health insurance include:
- Medicare
- Medicaid
- Children’s Health Insurance Programs (CHIP) and affiliated family health insurance programs
- Veteran health insurance programs
- State’s high risk pools
Payments
Commercial insurance through an employer may be fully paid by the employer or may be a shared cost. Some employers have health insurance programs that include full health insurance coverage paid for by the employer. Others have partial health insurance that may involve employee payment if he or she desires additional coverage, while some employers may provide full health insurance coverage but may ask that the employee contribute payment towards the premiums. There are some employers who do not provide any commercial health insurance coverage and the employee must provide his or her own.
Regulation
Each state government regulates the commercial health insurance in the state. Government plans vary a little from state to state and regulations of commercial health insurance can also vary widely between states. Laws and regulations covering employer-based commercial health insurance for employees are not the same as those regulating individual health insurance.
Types of Commercial Health Insurance
There are different types of commercial insurance, each with unique coverage and flexibility. Depending on the needs of the employer or individual, one type may work better than another. There are four major types of commercial health insurance:
- Indemnity (or fee-for-service) insurance cover a limited set of benefits and health related services. Individuals can choose their health care provider under this plan, but the coverage of the insurance may be limited to specified services and costs. Some, however, may be comprehensive and cover a wide range of health services.
- Health Maintenance Organizations (HMOs) usually have to provide a minimum set of services and most require the individual to choose a “primary care provider” (PCP) who will then be in charge of the individual’s health care. In order for the client to see a specialist or other doctor, he or she needs a referral from the PCP. All PCPs are chosen from a list provided by the HMO and the specialists must also be a part of the HMO listing. There are usually copayments involved with HMOs where the individual needs to pay a small amount for each visit to a health care provider.
- Point of Service Plans (POS) also require individuals to choose a primary care provider (PCP) from a designated list. The individual can also choose to see any health care professional who is not on their provider list (out-of-network). Generally, choosing to visit an out-of-network professional results in higher costs to the individual. POS plans are designed to have deductibles for such cases where the individual pays a certain amount before the health insurance covers any costs. If the individual sees professionals within the network then only a small copayment is necessary.
- Preferred Provider Organizations (PPOs) give individuals a list of doctors and health care professionals that can provide service at a discounted price. If the individual chooses to visit a professional not on the list then he or she will have to pay a larger portion of the medical costs. Unlike the POS plan, individuals are not required to choose a primary care provider.
Different commercial health insurance companies provide services in different states. Check with your state insurance division to find out what companies provide services in your state.
