Health Insurance Basics

 

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Questions to Ask:

  • Types of Health Insurance
  • Understand the terms
  • How much does Health insurance cost?

 

                 Even if you are usually in good health, the use of the health care system will be necessary at some point in one's life.  Accidents may happen or your family member might get sick and need a doctor. Health insurance provides an affordable way to get medical care when it is needed.

Health insurance also protects you and your family from the high cost of health care. The cost of even routine care can quickly add up, but the cost of care for a major illness or injury can be devastating. At any age, and every level of personal health, health care costs should be something you take seriously. That is what health insurance is all about — covering the expenses that come with preventing illness and staying healthy, and being prepared for the worst that could happen.

Many people do not think about health insurance until they need it, but this is a mistake. By doing some research and making good choices ahead of time, you can save time and money down the road.


Terms and Concepts

Deductible: This is a set amount you have to pay toward your medical bills every year before your insurance company starts paying. It varies by plan and some plans have no deductible. 

Premium: This is the amount you pay your health insurance company to keep your coverage active. Most people pay their premium monthly. 

Coinsurance: This is the percentage of your medical bill you share with your insurance company after you’ve paid your deductible. Unless you have a policy with 100 percent coverage for everything, you have to pay a coinsurance amount. For example, if you have a $100 doctor’s bill and your plan covers 80 percent of it, your coinsurance amount due to the doctor’s office is 20 percent, or $20. 

Copayment (or “Copay”): Your copayment, or copay, is the flat fee you pay every time you go to the doctor or fill a prescription. It’s usually a relatively small dollar amount. Copays do not count toward your deductible. 

 

HMO plans- give you access to certain doctors and hospitals within its network. A network is made up of providers that have agreed to lower their rates for plan members and also meet quality standards. But unlike other insurance plan types, care is covered only if you see a provider within that HMO’s network. There are few opportunities to see a non-network provider. There are also typically more restrictions for coverage than other plans, such as allowing only a certain number of visits, tests or treatments. 

  • You’re required to select a primary care physician (PCP), who will determine what treatment you need.
  • You will need a PCP referral to be covered when you see a specialist or have a special test done.
  • If you opt to see a doctor outside of an HMO network, there is no coverage, meaning you will have to pay the entire cost of medical services.
  • Premiums are generally lower for HMO plans, and there is usually no deductible or a low one.

PPO plans- provide more flexibility when picking a doctor or hospital. They also feature a network of providers, but there are fewer restrictions on seeing non-network providers. In addition, your PPO insurance will pay if you see a non-network provider, although it may be at a lower rate. 

  • You can see the doctor or specialist you’d like without having to see a PCP first.
  • You can see a doctor or go to a hospital outside the network and you may be covered. However, your benefits will be better if you stay in the PPO network.
  • Premiums tend to be higher, and it’s common for there to be a deductible.