Group Health Insurance - What is it?

Whether they have it or not, pretty much everyone has heard of health insurance. Most people know some of the basics of health insurance and what it does, but others have no idea what health insurance really is. So, just what is health insurance?

Health insurance is actually one of the many forms of group insurance, where individuals pay a premium or taxes to help cover themselves and their families against health care expenses. Health insurance works by taking an estimate of the risk for health care expenses and creating a financial payment structure throughout the plan year. This payment structure is usually in the form of a premium or taxes. By creating a payment structure throughout a plan year, the individual can be sure that the money will be there when they, or their family, needs medical care. The overall health care benefit is regulated by a central organization, which is usually the insurance company.

A health insurance policy is actually a contract between and individual and the insurance company. This contract is renewed each time the individual pays their premium, no matter if that is each month or each year. There are many different forms of payment, such as a premium, a deductible, a copayment, or coinsurance. The amount of health care benefit that the individual receives is listed in the contract, and is covered by the insurance company according to this contract. Some health insurance policies cover the costs of prescription drugs, which help the patient to get the medication they are prescribed by their health care professional.

With health insurance, most doctors and medical professionals will bill the insurance company for the individual as long as the individual signs an agreement with the medical office that they will pay anything that the insurance company will not pay. For this reason, most insurance providers have a list of health care professionals that they refer to as "in network" since they work with these providers on a constant basis. These providers agree to take the insurance payment for their services and waive anything above that with most companies.

Health insurance hasn't always been around though. In fact, the concept of it was proposed by Hugh the Elder Chamberlen in 1694. Later, in the 19th Century, "accident insurance" became available and worked in the same way that disability insurance works today. This insurance model lasted until the beginning of the 20th Century, with all other medical care coming directly out of the patient's pocket. Then, in the middle of the 20th Century, the "accident insurance" developed into what we know as health care today.

Bradley Palmer is with Grouphealthflorida.com offering Florida Group Health Insurance. To learn more about group health insurance, visit http://www.grouphealthflorida.com

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