It is important to understand the basics of health insurance because the way health care is funded directly affects the kind of health care given. There is no common type of policy, because there are so many coverage variations in today’s health insurance marketplace.
An individual policy is the most expensive kind of insurance because you are not in a group where you share the risk. These policies usually require a medical exam to qualify and if there is any potential health problem such as smoking, you could be turned down or asked to pay higher premiums. You will also pay more if you have a high risk lifestyle.
Freedom-of-choice plans let you choose any hospital or doctor. This type of policy has a deductible amount that you must pay first before the insurance company pays your medical bills. Your monthly payments will depend on the amount you are willing to pay as a deductible.
Health care plans obtained through an employer are usually managed care plans. They have a contract with health care providers, labs and hospitals to give care at a lower cost.
Health Maintenance Organization (HMO) —usually low cost but prescribes which doctors and hospitals to use
Preferred Provider Organizations (PPO)—more flexible than an HMO because any doctor can be seen, but doctors who participate in the plan will cost less
Exclusive Provider Organization (EPO)—like a PPO but with a smaller group of participating doctors
Point of Service (POS)—another plan with exclusive doctors and if a specialist is seen, it will cost more
Before choosing a managed plan it is wise to find out about the plans rate increases and deductible. Also, it is important to know in advance if it excludes preexisting conditions and has waiting periods for some benefits.
If coverage is under a group health plan through an employer and you become unemployed or reduce your hours, you, qualified dependents and your spouse can continue to be covered for up to 18 months through the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA). This time limit can be extended to 36 months for your spouse and dependents if you die or get divorced. Insurance coverage is good to have to help pay with medical feels. However, sometimes you have to pay out of your own pocket. If that day ever comes, you can try finding discounts for medical supplies at websites such as www.savings.com.
There are government sponsored programs for children under 18 who are not insured and whose family is below a specified level of income. These policies vary from state to state. They can be found at the state’s Department of Health and Human Services.
Medicaid is also government funded health insurance available to low-income people and those with disabilities. Something to be wary of is medical errors. Make sure you do your research in order to save money on healthcare.
Unexpected medical bills from illness or accidents at home or abroad can be huge and most people cannot afford to pay them from their personal finances. When people join together in a plan by paying a fixed amount, whether they use the insurance or not, they spread the risk and reduce the cost. The plan will cover medical expenses including doctors, emergency room visits, medications and hospital stays.