How does a health insurance policy or health plan protect me?

A health insurance plan or a health service plan protects an insured or member by promising to either pay for medical care or provide medical care. In the case of a health insurance policy traditional insurance provided that it would pay for any reasonable, medically necessary care required to treat an illness or injury. The insured, as a patient, was free to choose his or her health care provider, who would then in turn apply to the insurance company for reimbursement. While traditional fee for service health insurance policies are available, premiums for them have become very expensive.

In an effort to control health care costs, new forms of health insurance and health service plans have developed which have resulted in lower premiums. The lower premiums generally are achieved through a reduction in choice of health care providers, a reduction in the type and amount of benefits available, stricter controls on the type and amount of care given by providers and/or negotiated reduction of compensation to health care providers. These cost control measures include:

(1) limiting the health care providers the insured or member choose from to pre-approved list of health care providers,

(2) a requirement that any specialized care be can obtained only if recommended by a primary care physician, known as a "gatekeeper,"

(3) a requirement that any significant or costly care, such as any involving hospitalization, be pre-approved by the insurer or plan, and

(4) an application of aggressive utilization review which determines whether the care that was given was appropriate and not excessive.