Hospital Indemnity Insurance
Another basic category of cheap health insurance policy is generally called hospital indemnity insurance. This is not directly tied to health care costs. Although it is always grouped with other health care insurance, it really, as the name indicates, is insurance to augment your income, but since it pays during hospitalization, it is properly called health insurance. Do not confuse this with disability insurance, which has a much broader function and replaces part of your income without requiring hospitalization.
Service Type Insurance
There are types of cheap health insurance rate that do not quite fit into either of the previous categories, for instance, that offered by Blue Cross/Blue Shield; this is called service type insurance. For instance, Blue Cross negotiates contracts with "participating" hospitals to purchase their services at below the going rate. This practice has long been a source of irritation to private insurance companies that have had to pay the full rate.
At present most Blue Cross/Blue Shield organizations are nonprofit, although that is gradually changing. The Blues operate on a state by state basis, with coverage varying widely. If you have been happy with a Blues plan but move into another state, do not assume you will automatically have the same coverage; chances are there will be differences.
You should also be aware that Blue Cross and Blue Shield are not one company but two entirely separate ones, although they generally interface. In combination they offer essentially the kind of coverage found under medical expense insurance, sometimes though not invariably somewhat less expensively. Traditionally, they never offer hospital indemnity or disability insurance (but this may change as they give up their nonprofit status and move into the general health insurance field).