Public health insurance, such as Medicare and Medicaid, isn’t considered commercial health insurance because it’s government-run. However, Medicare Advantage and Medigap plans count as commercial health insurance since private health insurance companies manage them. Medical care can be expensive. If you don’t have health insurance, you’d have to pay for all of your doctor visits, procedures, prescription drugs, and other medical expenses out of pocket, which can be cost-prohibitive. Many people aren’t in a financial position to be able to afford this, which is why most of us turn to health insurance to help reduce health care costs. Commercial health insurance is an agreement between you and a health care company to share your medical costs. You pay a monthly premium to access the plan. The subsequent cost-sharing then occurs according to your plan details. Typically, you’ll pay for some of your medical costs through a deductible, copay, and coinsurance. The health insurer pays the rest.
Enrolling in Commercial Health Insurance
Before you can start using your commercial health insurance benefits, you must purchase a plan from your employer or on your own. If you have multiple plans to choose from, take time to compare the differences so you can pick the one that’s best for your family. When comparing health insurance plans, pay attention to the following specifications:
Type of plan (HMO, PPO, POS, etc.) Amount of monthly premium Amount of your deductible and any other out-of-pocket expenses (such as copays or coinsurance) Covered services (for instance, does the coverage include dental or vision?) Providers in the plan’s network Limits for out-of-pocket expenses
After comparing the options, decide which plan has out-of-pocket expenses you can manage with a monthly premium that fits in your budget. Then you can fill out the required paperwork and sign up.
Using Commercial Health Insurance
Once you’ve enrolled in a commercial health insurance plan, expect to receive a membership package with your insurance card and additional plan details. The exact services covered by commercial health insurance plans vary greatly, so you’ll want to hang onto your paperwork to review it as needed. You can also contact your insurance company if you have other questions. Once you have commercial health insurance, remember to take your card with you when you visit the doctor. When scheduling an appointment, verify that the doctor is covered by your plan. Some health insurance policies limit you to a specific network of providers, so you’ll want to make sure your doctor or health care practitioner accepts your specific insurance. After arriving at your appointment, your doctor’s office will check your insurance to verify coverage. When your appointment is over, your provider will file a claim with your insurer. Your insurance company will review the claim and send the covered amount of money to the provider. If there’s a balance, you will receive a bill.
Types of Commercial Health Insurance
There are several kinds of commercial health insurance policies. Here are some common types:
Health maintenance organization (HMO)Preferred provider organizations (PPO) Point-of-Service (POS)Medicare Advantage plans
Health Maintenance Organizations (HMO)
HMOs have a network of health care providers that have agreed to cap billing at a certain level. This arrangement helps to keep costs low. HMOs are typically less expensive than other types of insurance plans. However, you must get a referral from your primary care doctor before you can see any other medical practitioners. And, since there are a limited number of providers to work with, you may have less flexibility.
Preferred Provider Organizations (PPO)
PPOs provide more flexibility compared to HMOs. However, they do tend to have higher out-of-pocket fees. With these plans, you don’t need to pick a primary care doctor. You can also see a doctor or specialist out of network if you want, though you may have to pay more if you do.
Point-of-Service Plans (POS)
A POS plan combines some features from an HMO with other features from a PPO. With this type of insurance plan, you must get a referral from a primary care doctor before you can see a specialist. But you can go to doctors outside of your network if you choose. If you go out of the network, you’ll most likely have to pay a higher rate.
Medicare Advantage Plans
Original Medicare is federally funded and isn’t considered commercial health insurance. However, during the open enrollment period you can switch from Original Medicare to Medicare Part C, which is also known as “Medicare Advantage.” Private companies administer these plans, which provide at least the same benefits as Original Medicare. They often provide additional coverage as well, such as prescription drug coverage.
The Bottom Line
If you aren’t on a public health insurance plan such as Medicare or Medicaid, chances are good that you have commercial health insurance. There are many different types of plans out there, so make sure you choose the one that works for you.
