ABA Family Legal Guide

Health-Care Law

Health-Care Options

Health Insurance and Managed Care Organizations

What is a health insurance policy?

A traditional health insurance policy is like insurance for your house or your car—you pay a premium, and the insurance company promises to pay your health-care services. Generally, in addition to payment of a premium, you are also responsible for payment of deductibles and co-payments (a percentage of actual charges or a fixed amount per visit), which are predetermined in the policy at set amounts or rates. You are free to choose your health-care provider, which then applies to the insurance company for reimbursement.

While traditional fee-for-service health insurance policies are available, premiums for them have become very expensive.