Private healthcare system
The average American looking to enter the private healthcare system should be aware of the range of options available. Contrary to popular belief, there is a very wide range of healthcare plans in the private health sector, and a proper examination of all of them should be undertaken prior to making a decision.In the context of the private healthcare system, a consumer-driven health care plan allows patients to use Health Savings Accounts and Health Reimbursement Arrangements to pay for routine medical expenses, with a backup health insurance policy on standby in the event of high-cost medical attention becoming necessary. Patients paying for consumer-driven health care plans typically pay lower monthly premiums but do not receive health insurance benefits for low-cost medical expenses. A Health Savings Account is a federal income tax-free medical savings account with deposits made by a policyholder or a policyholder’s employer. A Health Reimbursement Arrangement allows a patient’s employer to reimburse the medical expenses already paid by an employee. Health Reimbursement Arrangements must be funded solely by the employer, and contributions cannot be made through salary sacrifice programs. Consumer-driven health care plans are popular with employers due to their low cost, but have been met with mixed reactions from consumers. In 2008, 58% of Americans with private health insurance had the option to receive cover under a preferred provider organization agreement under their plan. A preferred provider organization is a group of healthcare providers that contracts with an insurer or another administrator to provide healthcare at a reduced rate to the clients of the insurer or administrator. This provides benefits for all parties involved; the patient pays a lower copayment (the difference between what the insurer covers and what the cost of the treatment is), the insurer does not have to pay as much for its clients’ healthcare and the ‘preferred providers’ will see an increase in business due to the reduced rate offered to patients.Remember, it is important to assess each insurer in the private healthcare system on its merits and conduct proper inquiry into the operation of the different types of insurers before making a decision relating to healthcare.