Also known as private health insurance, commercial health insurance is any type of health insurance that is not offered and managed by a government entity. Companies that sell this type of insurance are for-profit corporations, 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 available only to those who are willing to pay premiums in exchange for the coverage.
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 hours worked, time with the company, and other factors may be enrolled into the program. Depending on the way that the insurance program is arranged, the employer may absorb the total cost of the monthly premium for each employee, or pay a percentage of the total premium. When that is the case, the employee pays for the remainder of the premium due via a payroll deduction that is withheld 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 is known as a point of service plan. This type of insurance coverage allows the client to choose a primary care physician from the list provided by the insurance carrier. Using healthcare professionals that are considered to be in-network ensures that the provider covers a larger share of any medical expenses that qualify under the terms of the contract. Should the client choose to utilize a physician outside the provider’s network, the benefits paid per medical incident are usually decreased.
Another popular option is known as the health maintenance organization, or HMO. As with the point of service approach, participants in an HMO choose a primary care physician from a listing supplied by the provider. In order to see a specialist, the primary care physician must officially refer the patient to that specialist. This type of plan rarely covers medical care provided by healthcare professionals outside the network, except under unusual circumstances.
Another option for commercial health insurance is the fee-for-service, or indemnity model. This type of program covers a specific listing of healthcare procedures. Clients can see any physician or specialist they wish, without any decrease in benefits. Plans of this type may be very limited in scope, such as focusing on office visits and procedures that are done in the physician’s office. Other indemnity plans are more comprehensive, and include coverage for hospital care related to conditions listed in the provisions of the contract.
When evaluating any type of commercial health insurance, it is important to make sure the plan will provide adequate coverage. This means reading the terms carefully as they related to routine checkups, outpatient procedures, hospital stays, mental health treatments, and the amounts of all applicable deductibles and co-payments. In addition, many people will want to include long-term care insurance in the coverage, as this can help alleviate financial hardship during an extended illness.