VIEWS: 0 PAGES: 2 CATEGORY: Health Insurance POSTED ON: 9/4/2013
Before you purchase or decide not to purchase it is best to first understand the advantages that health insurance provides and the potential costs.
Advantages of Health Insurance No one plans to get sick or hurt, but preparing for the unexpected is advantageous for a number of reasons. Health care benefits, included in an individual health insurance plan, can help prevent you from contracting a serious illness or diseases and diagnose these problems much faster. So what is health insurance anyway? It’s a contract between you and your health insurance provider. The contract is valid once you buy one of many consumer driven health plans; the agreement is the health insurance company will pay part of your medical costs whenever medical care is needed. How does health insurance coverage work? The plan outlines how much you will pay and how much the insurance company will pay. These payments are divided into different sections and enacted at different times. A premium is the monthly amount the policy holder pays to keep the contract valid and active. This bill is generally paid monthly, even if you don’t have any medical expenses that month. A deductible is the amount the policy holder must pay to receive the health benefits and care given. This amount is paid before the health insurance company will pay their portion. The amount of the deductible can vary greatly depending on the plan. The cost of the deductible and the cost of your premium have an inverse relationship. If you are relatively healthy, you may consider having a lower premium and higher deductible. If you have routine medical visits a higher premium with a lower deductible may be a better choice for you and your family. Copayments A copayment, most often simply called a copay, is a fixed amount the policy holder must pay after you’ve met your deductible. The set amount for each copay is predetermined. This practice is extremely common, especially with doctor visits. For example, say I went to visit my primary physician after my deductible was met. If the visit cost $175, I would pay a $25 copay and the insurance company would pay the remaining $150. Those expect to have frequent doctor visits will greatly benefit from having affordable health insurance. Coinsurance is similar to a copay, but the amount is determined by a percentage instead of a set amount. For example if my coinsurance responsibility was 20 percent, a $100 doctor visit would cost me $20. The health insurance benefits are numerous; namely it saves you from high unexpected costs. On the whole, health care is not cheap. For example, a three-day stay in a hospital can cost around $30,000. Even an injury that may seem routine, like repairing a broken arm, costs thousands of dollars. Out of Pocket Most, if not all, personal health insurance plans also include an out of pocket maximum. For example, if you got sick and had an out of pocket maximum of $5,000. Once you have paid a total of $5,000 through your deductible, copays, and coinsurance, your health insurance provider will pay the remainder of your bills for the year. Finally, most insurance companies do not have a yearly or lifetime limit of the amount of money they can spend on you or your family. You truly are protected from unreasonable financial hardship should tragedy strike. Photo Credit: Alex #. Proimos, Stevendepolo,
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