Health Insurance Providers

Health insurance providers come in many forms, but they can be reduced to two major groups: privately owned companies and programs operated by the government. As a medical billing specialist, you should be well versed in the differences between these providers and the plans that they offer.

Government Insurance Providers

The federal and state governments fund and operate several government insurance providers. Many of the government-operated insurance programs are specifically designed to cover a certain part of the population, such as veterans, the elderly, or low-income persons. Below are some of the government insurance providers that you will encounter when filing claims:

• Civilian Health and Medical Program of the Department of Veterans Affairs (CHAMPVA): This government program covers certain healthcare costs for dependents of veterans who are permanently disabled due to injuries or conditions suffered during service, as well as dependents of veterans who died during service.
• Consolidated Omnibus Recollection Act (COBRA): COBRA was a law passed by the federal government to serve as a safety net for individuals recently terminated by a company that provided health insurance. Under COBRA, terminated employees and their dependents can still receive health insurance from their previous company’s healthcare plan for up 18 months, and up to 36 months if they are disabled.
• Medicare: Medicare is a program started by the federal government to provide healthcare coverage options for persons over 65 years old, as well as younger people with disabilities. The Medicare program itself is broken up into several parts, each of which provides insurance that covers certain aspects of healthcare (such as prescription drug coverage) to eligible individuals.
• Medicaid: Medicaid is a program started by the federal government to offer healthcare coverage to low-income individuals. The costs of the Medicaid program are divided between the state and federal governments, a complication you will need to be aware of as you file claims. Note that all states have their own version of a Medicaid program, though they all must meet minimum requirements of care as established by the federal government.
• Children’s Health Insurance Program (CHIP): This program provides health insurance to children of families who can’t afford private coverage and whose incomes are too high to receive Medicaid coverage. CHIP is jointly funded by state and federal governments just like Medicaid, and each state has a different interpretation of its program.
• TRICARE: This healthcare program provides insurance to active-service members and their families, retired military personnel and their families, and the survivors of deceased service members. TRICARE (formerly known as Civilian Health and Medical Program of the Uniformed Services, or CHAMPUS) is funded and run by the federal government.
• Worker’s Compensation Insurance: This type of health insurance is available for employees who suffer injuries or illnesses while performing their regular work duties. Worker’s compensation insurance is required by law in most states.

There are other federal and state insurance programs available to those who are eligible, but those mentioned above make up the majority that you will encounter as a medical billing specialist. 

Commercial Insurance Providers

Commercial insurance providers are private insurance companies that contract with businesses or individuals to help cover healthcare costs according to criteria set forth in a formal health plan. Private health insurance plans typically require that the company or the individual receiving coverage pay a predetermined deductible or a monthly premium before benefits take effect.

Commercial health insurance providers offer plans that can be sold individually or collectively as a group plan. Plans offered by commercial insurance providers range in price and in the scope of services covered. Coverage from commercial providers depends on a number of factors, including a patient’s personal medical history, family medical history, and the amount of money the patient (or the sponsoring employer) is willing to spend on premiums, co-pays, and deductibles.

Most Americans who have health insurance have plans with private insurers. According to a recent survey by the Center for Disease Control, nearly 64.2% of insured Americans have private health insurance. Commercial insurance providers include companies like Aetna, United Health Care, and Prudential.

Key Differences Between Government and Commercial Insurance Providers

It is important to keep in mind that commercial insurance providers are for-profit institutions whose success depends on the premiums that they receive from insured businesses and individuals. As such, commercial insurance providers are likely to provide coverage for people who have an uneventful medical history rather than someone with a long history of medical problems. Commercial insurance providers make money by avoiding as much risk as possible in their health plans. If a private insurance company mostly covers people who need constant medical attention for chronic illnesses or conditions, that company would be in danger of offsetting the revenue generated by its premiums.

Government insurance providers are a reliable alternative for certain people denied coverage by commercial insurance providers. Because government insurance providers aren’t interested in generating a profit from premiums, they can afford to cover “riskier” people.