Tuesday, August 11, 2009

Health Insurance Companies: Who's Who

Health Insurance Companies: Who's WhoHealth insurance is a form of risk management, that is essentially used to oppose vigorously against the health risk of any trauma, disease or other health problem. Health insurance can be defined as a guaranteed small loss to prevent a large, possibly of disease or the necessity of medical treatment. An insurer is, as a rule, a company marketing the insurance, contrariwise an insured is the policyholder person who buys the insurance. So, the health insurance companies render health insurance services to their policyholders.

Health insurance began in the 1930s with so called Blue Cross. This system was successfully offering pre-paid hospitalization. With its success, physicians formed Blue Shield. The prosperity of this health care system, as well as high costs of health services, brings about the need to develop health insurance. That is why a bit later commercial insurance companies started to offer group insurance.

Health insurance companies are familiarly classified as either mutual or stock companies. Mutual companies are usually appertaining by the policyholders. On the other hand the stockholders (notwithstanding if they have policies) own stock insurance companies.

There are also some other forms for an insurance companies include reciprocals, when policyholders pay back in sharing risks of the organizations.

Health insurance companies are standardized by various agencies. The ratings include the company's creditworthiness, which measures its ability to pay claims. It also determines financial instruments issued by the insurance company, such as promissory notes, certificates, and enforcement proceeding.

Now, let’s refer to different types of health insurance companies.

In Major Medical Insurance, the insured is responsible for paying a subscription before insurance provide benefits. In this system, the health insurance companies usually pay 80% of the medical bills and the policyholder the residuary 20%. The insured has a right to prefer any doctor or hospital. When we speak about "traditional health insurance", the Major Medical Health Insurance is exactly meant.

Health Maintenance Organization (HMO), is a type of insurance plan, that is realizeŠ² by the particular health insurance companies. HMO keeps its mind on the long-term insurance. HMOs are called the "managed health care".

There is also a Preferred Provider Organization (PPO). It is to a large extent similar to an HMO, with a singular distinction that an insured is not limited to network physicians and can prefer any doctor they choose.