Family health insurance, as with individual health insurance, can be categorized as either indemnity (fee-for-service) or managed care health insurance. Managed care plans come in a variety of "flavors": Health Maintenance Organizations (HMO), Preferred Provider Organization (PPO), and Point of Service (POS). It's important to also realize that if you are not eligible for a group health insurance plan (e.g. self-employed or unemployed), you actually require an individual health plan, regardless if you need coverage for simply yourself or for you and your family.
This use of the terms individual and family health insurance is often a source of confusion to those in the health insurance market. Health insurance for individuals can be issued to either an individual (i.e. one person), or to a family (i.e. more than one person). As you can see the confusion centers around the fact that for an individual policy that is issued for a family, more than one individual is covered.
The difference can also be described in terms of the plan as opposed to the quantity of people covered. That is, when using the term individual health insurance, whether for one individual or one family, the "individual" descriptor in reality refers to the fact that an individual policy is issued as opposed to a group policy.
Even though the terms family health insurance and individual health insurance are often used interchangeably, there is one main difference. This difference is, as you probably already know, cost. An individual family health insurance policy is always going to be more expensive than a single person policy for the simple reason that more people are covered.
When shopping for family health insurance, you will quickly see that there are several different types from which to choose. There really is no "right" choice, as every family's situation is unique. Indeed, not only may one plan be right for one family, but not for another, you may run into a situation where, within a family, one plan is right for one member, but not for another.
For example, for families with just two adults, it may make more sense for each family member to have their own individual policy. This affords each family member the opportunity to tailor their policy more closely to their own needs. This option can also be, at times, actually less expensive than a single family plan. If this option interests you, be sure to discuss it with your health insurance broker.
Family managed health insurance plans have all but replaced traditional indemnity plans. The reason for this is, again as you may have guessed, cost. As health care costs have continued to rise at double digit rates, managed care plans have been able to control costs better than indemnity plans, so therefore have become more popular.
Please look for the continuation of this article in Interesting Facts You May Not Have Known About Family Health Insurance (Part II)...
