There are a variety of policies which insurance companies offer on an individual basis. Some of the more common types of policies include:

1. Major Medical - provides coverage for doctor visits, surgery and hospitalization or ongoing illnesses.

2. Hospital and Surgery - provides coverage solely related to hospital stays and surgical services, such as room and board, laboratory tests, X-rays, plus doctors’ charges

3. Hospital Confinement Indemnity - a policy designed to pay a set amount (an indemnity) for each day you are an "in-patient" at a hospital.

4. Health Maintenance Organizations (HMOs) - centralized service provider, commonly with a general practitioner (limited selection of participating doctors) coupled with coverage by specialists upon referral. Doctor visits, surgery, hospitalization and often reduced-rate prescription medicine are provided. May also cover preventive care, often not included in major medical policies.

5. Specified Disease (also called “Dread Disease”) - covers costs associated with a single disease, such as cancer, AIDS, heart attack, etc.

6. Short-Term - typically a major medical policy but with coverage lasting only for a specified length of time. Might be purchased to cover the time you are between jobs.

7. Accident Only - provides coverage for doctor visits, surgery and hospitalization resulting from an accident (no coverage for disease or illness).

8. Dental - provides coverage for costs associated with dentists and orthodontists.

9. Vision - provides coverage for sight correction

10. Home-Health Care - care provided to enable you to remain in your home while receiving services which can range from assisted living (help around the house) to around-the clock nursing with other health care providers on call.

11. Long -Term Care - coverage provided to individuals who otherwise would not be able to take care of themselves. A range of services from delivery of prepared meals, assistance with managing the residence, to stays in residential facilities. Often associated with long-term illness and the elderly.

12. Limited - Benefit - not very common, a bare-bones type of coverage intended to cover specific situations.

Since many people have available medical insurance from more than one plan (such as two employed spouses covered under group health insurance plans), insurance companies do not want insureds to profit through their health insurance. To prevent double recovery, most health insurance plans have provisions which determine how primary versus secondary coverage will be determined.

Primary coverage is provided through the plan of which they are a member (such as the spouses both covered through their respective employment - the primary coverage is provided under the plan provided by the employer of each spouse) or the plan under which the member has been a participant for the longest time period.

Secondary coverage, usually as a result of being covered as a dependent under someone else's health insurance plan, provides reimbursement for medical expenses after exhaustion of coverage available through the primary plan.

Medical expenses as the result of accident, illness, injury, and disease are typically covered by medical insurance. The particulars of how much coverage for each expense incurred is determined by the provisions of the particular health insurance policy.

Typically doctor visits, surgeon and surgery expenses, costs of hospitalization, and follow-up therapy are covered by health insurance. Some plans provide for psychiatric care, drug and alcohol rehabilitation programs, and prescription medicines.

There are a variety of exclusions and limitations with respect to health insurance. Common exclusions include pre-existing conditions (subject to portability of insurance as discussed below), substance abuse, attempted suicide, mental illness, reimbursement through a Workers’ Compensation insurance program, cosmetic or elective surgery and procedures, optical and dental coverage, prescription medicine, and procedures determined to be preventive care.

Many individual health insurance policies exclude coverage for medical conditions that exist prior to the inception of the coverage. This is commonly referred to as a "pre-existing condition" exclusion. Common pre-existing condition periods are six months and 1 year prior to the inception of the insurance coverage. Other common exclusions include: psychiatric care, alcohol and drug related problems, prescription medicines, and elective or cosmetic surgery and services.

On occasion, these terms have been used interchangeably. However, it is preferable to define the two terms differently, despite their similarity of purpose. Under a copayment or copay provision, the insured usually is required to pay a set or fixed dollar amount (e.g., $10, $20, or $30) each time a particular medical service is used. Copay provisions are frequently found in medical plans offered by health maintenance organizations (HMOs) where a nominal copayment is applied to each office visit and to each prescription that is filled.

Insurance premiums are determined by actuaries employed by insurance companies. The cost of advertising, selling, paying for services rendered by health care practitioners, administration of the insurance program as well as the investment of premium payments and a profit margin are factored into the premium amount. Actuaries determine the exposure to risk according to the provisions of the insurance policy and then set a premium rate. Additional underwriting factors, such as adverse selection for individual policies and special industry exposures for employer-sponsored group health insurance plans, are also factors of the premium charged.

Often the premium charged on an individual plan is much higher than the premium charged for similar coverages offered through a group plan due to "adverse selection." Under group plans, an insurance company can determine that a percentage of participants will generally be in good health. Under individual plans, it is more likely that people in poor health and having a greater need for insurance will seek to buy coverage - "adverse selection" is the result of the basic premise that those people in good health do not have as much need for insurance as people who are in poor health.

Purchasers of insurance often can control several factors used to determine the insurance premium. Some of these factors, which act as limitations of the insurance coverage, include:

• Deductibles - The amount you yourself have to pay out-of-pocket before reimbursement of your expenses from the insurance coverage. It is usually a flat dollar amount. The higher the deductible, the lower the premium.

• Co-payments and co-insurance – for example, in a 80/20 plan, the insurance pays 80% of the covered expense and you pay out-of-pocket the remaining 20%. Most plans with a co-pay have a maximum, out-of-pocket, cost.

• Lifetime maximums - the maximum amount of insurance coverage that will be paid on your behalf during your lifetime. The higher the maximum, the more coverage is potentially available under the insurance coverage.

• Annual or "out-of-pocket" limits - the maximum amount of deductible and co-payments you will have to pay each year. The lower the annual limit, the higher the premium.

• Coordination of Benefits - some insurance companies now offer insurance plans which recognize the fact that other insurance may be available to you, such as coverages under worker's compensation, automobile insurance, a state disability program, or from coverage available as an employee benefit to a spouse. This provision specifies how multiple coverages will coordinate their payments.

• Renewability/Cancellation - some insurance companies offer health insurance on a guaranteed renewable basis or with a non-cancellation provision (meaning that the insurance company may only cancel coverage in the event of non-payment of premium). Expect there to be an added cost for these features.

Some large employers operate their own health insurance plan as opposed to purchasing coverage from an insurance company. Typically the large employer pays a third party (such as an insurance company or other administrator of health care claims) to administer the plan which they have designed for their employees - the large employer pays the costs (claims plus administration) directly out of the company's coffer. While the large employer saves the profit margin that an insurance company builds into its premium, it raises the exposure of the large company to greater risk in the event that more claims than anticipated must be paid. Due to the nature of these plans (and tight regulation of such plans), most self-insured employer-sponsored plans are very efficient and provide good health insurance benefits to employees.

While technically not a health insurance plan, some employers provide their employees with an annual amount placed into an account earmarked to help the employee take care of his or her health care expenses. For example, an employer may place $2,500 into an account for the employee to use for their health care needs. The employee may draw on the account to buy health care insurance or pay policy deductibles, co-payments or medical expenses not covered by his or her health insurance policy. In addition, the employee may periodically withdraw money from the MSA, but there may be tax implications if used for non-eligible health care expenses.

The main advantage of an MSA is that you will not pay income taxes on any money put in the account.

A Cafeteria Plan gives the employee a range of options about the types and levels of benefits, as opposed to having these decided by the employer and the insurer. Under a cafeteria plan, the employee may choose among 2 or more benefits consisting of cash and qualified benefits (such as health insurance, optical plan, dental plan, short-term disability coverage, life insurance, or additional sick days or vacation time). The employee decides which benefits fit his/her needs and utilizes the benefits selected.

For terminated or retiring employees, or those losing coverage because of reduced work hours, a provision called COBRA (the Consolidated Omnibus Budget Reconciliation Act) obligates your employer to let you buy group coverage for up to 18 months after leaving. COBRA applies to all employers with 20 or more workers.

Your employer will furnish you (or your spouse) a booklet that explains all the twists and turns under COBRA as well as a summary plan description that contains information about COBRA. In addition, when a plan receives notice of a qualifying event, the plan must notify the covered person of their right to choose continuation of coverage.

If you basically healthy, not yet eligible for Medicare, it might be thriftier to purchase a policy through a trade union or professional association. Another option is to buy a non-HMO policy that has a large deductible, a low premium, and save on out-of-pocket costs.

A better option would be to call other self-employed folks and ask them to steer you to insurers who have fair and well-priced coverage. Don’t leap, though, at every policy pitch; you don’t want to be broke within a year of two of paying outrageous premiums.

HMO: An HMO (Health Maintenance Organization) is an organization that provides or arranges for coverage of certain health care services required by members of the organization. Typical HMO coverages include access to a primary care physician, emergency care, and specialists/hospitalization when needed.

Many HMOs operate with preventative medicine in mind by addressing your health care needs while you are healthy so as to prevent disease or illness.

Critics of HMOs address concerns as to a lack of selection of primary care physicians, "assembly line" medicine, and denial of adequate referrals in the event of disease or illness. Critics often claim that a HMO may deny certain claims and may make health care decisions based upon a pure profitability standpoint as opposed to decisions driven by providing the best level of care for its patients.

HMOs are valuable in providing good care for many members – many HMOs organizations take very good care of their members’ health care needs while managing costs.

IPO: IPO (Independent Provider Organization) operates by having an HMO contract directly with independent physicians to provides services to HMO members.

PPO: PPO (Preferred Provider Organization) is a form of managed care under which health care providers contract to provide medical services at pre-negotiated rates. Members who subscribe to a PPO are required to use the health care providers who participate in the PPO network - utilization of a health care provider outside the PPO network may result in the member paying more out-of-pocket for services which could have been provided within the network.

HMOs often use a PRO (Peer Review Organization) to assure that members receive appropriate services that meet professional standards of care. Complaints regarding levels of service are often referred to the PRO for resolution.

POS: POS (Point of Service) plans allow the individual policy holder or certificate holder to visit out-of-network, non-participating doctors for a fee. If the services of a non-participating health care provider are utilized, the individual often obtains restrictions of benefits or incurs more out-of-pocket costs.

For starters. Check your policy or employee booklet for the company’s appeal procedures. Then phone and speak to a representative and ask why it rejected the claim. If still unsuccessful, contact your state’s insurance regulatory office for help. Usually a company will be more inclined to resolve a dispute after the state office jumps in on your behalf.

In some states, there is a procedure for “external review” of your dispute, which means an independent panel will review your case.