Health insurance is a contract between you and your insurance company. You buy a plan or policy, and the company agrees to pay part of your medical expenses when you get sick or hurt. Even when you need care that costs more than you pay in premiums and deductibles, insurance will cover the care you need.
What is health insurance ?
Medical insurance was a phrase used in the past to refer to insurance that focused on paying doctors and hospital bills. Over time insurance plans have grown to cover not only medically related charges but to also promote healthier living habits. Hence, health insurance is a more appropriate phrase.
A standard health insurance policy usually gives you access to preventive care to keep you healthy, like vaccines and check-ups. Most plans cover prescription drugs and some even provide free or discounted health club memberships.
♦ Health insurance is intend to help you pay for health care, not pay all.
Even a short hospital stay can cause a financial disaster if you do not have health insurance. Did you know the average cost of a 3-day hospital stay is $30,000. Fixing a broken leg can cost up to $7,500. We need insurance to help with things like this.
Why do I need health insurance ?
Health care is expensive. There is no getting around this point. Health insurance is a tool that can be used to protect you and your family from unexpected medical costs.
Your insurance policy will show what types of care, treatments and services are covered, including how much the insurance company will pay for different treatments in different situations.
• It is important to read and understand your policy’s benefit descriptions.
Insurance helps pay costs when you need care. Insurance protects you from high costs when something bad happens.
No one plans to get sick or hurt, but most people need to get treated for an illness or injury at some point, and health insurance helps pay these costs.
You buy health insurance to protect you and your family when you need health care.
When you understand how health insurance works, you will be a more informed consumer. You will know how to find coverage that fits your needs. Helping you to better understand is the main purpose of our website.
6 things to know about health insurance
Many Choices — There are many kinds of health insurance policies. Different kinds of policies can offer very different kinds of benefits. Some can limit which doctors, hospitals, or other providers you can use.
Share Costs — Insurance pays but you will also have to pay a portion of your medical expenses. You may have to pay coinsurance or a copayment as your share of the cost when you receive medical care like doctor visits, hospital services or a prescription.
Coinsurance & Copay — Coinsurance is usually a percentage amount.
• 20% of the total allowed charges is typical
A copayment is usually a set dollar amount
• An office visit with your family doctor might be $20
• A prescription for a generic medicine could be $10
Read more about copays and coinsurance.
Deductible — You may have to pay a deductible each plan year before your insurance starts to pay.
• As an example: A visit to the emergency room could easily require you to pay all your deductible first before your insurance would starts to pay. A $3,500 annual deductible is a huge burden that is now very common.
Networks — Networks are the key to keeping costs down. Health insurance plans contract with networks of hospitals, doctors, pharmacies, and health care providers to take care of people in the plan.
• Depending on the type of policy you buy, your plan may only pay for your care when you get it from a provider in the plan’s network.
Some plans may require you to pay a larger percentage of the bill if you use a doctor or hospital that is not in your plan’s network.
Insurance-like but not — You may see products that look and sound like health insurance, but don’t give you the same protection as full health insurance.
• Some examples are policies that only cover certain diseases, policies that only cover you if you’re hurt in an accident, or plans that offer you discounts on health services.
Don’t mistake insurance-like products for a true health insurance plan. Health insurance plans usually cover most medical problems.
Read more ...How to choose health insurance