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Private Health Insurance Advantages and Disadvantages

Health insurance is the primary vehicle that most customers use to pay for medical and hospital bills. There is public health insurance like Medicare and Medicaid, and there is private health insurance. Within the private health insurance group, there are significant differences between a health managed organization (HMO) and a preferred provider organization (PPO) plan. Depending on the form of private health insurance you choose, there will be certain advantages and disadvantages. While many financial planners will encourage you to carry a form of private coverage, it can come with some shortcomings that should be considered when you buy a policy. Here is a list of the disadvantages and advantages of private health insurance that you should know about to make the appropriate choice.

Private Health Insurance Advantages

Of course, the most obvious advantage is that health insurance can offer coverage for some healthcare expenses. Doctor’s visit trips to the emergency room and expert treatments may be paid for (either in part or in whole) by this form of insurance. With health insurance, large hospital bills related to surgery or other major treatments may also be covered depending on your specific policy.

And a PPO health insurance plan may also allow you to select your own doctor, though you may pay more if he or she is not included in the network maintained by your health insurance carrier.

Private coverage also usually comes with a lot of choices than those offered by public plans such as Medicare. This could enable you to select the options you are most likely to need and omit those you don’t. The experiences that come with private health insurance might include shorter wait times, more considerable personalized attention, and more sophisticated facilities. Public facilities can be overcrowded at times and may offer a lower level of care in many instances.

Disadvantages of Private Health Insurance

As you might expect, the greatest private health insurance disadvantage can be the cost. This is especially true if you are in poor health and do not have access to group coverage of any type. Most individual policies can cost several hundred dollars a month, and family coverage can be even higher. And even the more inclusive policies come with deductibles and copays that insureds must meet before their coverage kicks in.

Most health insurance policies don’t provide coverage for all kinds of diseases and conditions. Those who require care that falls into one of the gaps written into these policies are on their own when it comes to paying for certain medical services. Additionally, the cost of healthcare has risen much faster than the general rate of inflation, and this trend shows no sign of slowing.

These are just some of the advantages and disadvantages of private health insurance in the marketplace currently. For additional information regarding the types of health insurance, contact your employer benefit representative or your financial advisor.

Resources and References:

• Advantages of Private Health Insurance
• Health Insurance Policies in the U.S.