- Health Insurance - What To Look For In A Policy
- By:Craig Thornburrow
Health Insurance generally refers to a policy that covers medical expenses, but can also be used to describe policies for disability or long term care. The main premise is that the individual will pay a small periodic premium in advance of necessary medical care and the medical insurance will pay all or most of the unexpected, large medical bill at the time the care is needed. What costs are the individual's responsibilities?
The first cost associated with having health insurance is the premium. This is the amount that the individual pays on a monthly basis to purchase the health plan. These vary widely depending on what type of plan you purchase.
Another cost you will need to know about is the co-pay. This can range from $0 to $500 depending on the plan and the service you are receiving. A well visit, for example, may cost you a co-pay of $30, while a trip to the emergency room may be $50. Each plan and company has its own negotiated list of co-pays so be sure to read carefully when comparing plans.
An important cost you need to know about is the deductible. This is the amount that you will need to pay out-of-pocket each year before your plan pays anything. For example, if your deductible is $500, you will need to pay all medical costs such as doctor visits, blood work, and pharmaceutical purchases up to $500 before insurance will pay the first dime. At that time, you will become responsible for any co-pays. Every year you will need to start accruing your deductible before the insurance pays for medical bills.
You could have a plan that does not have co-pays. You could instead have coinsurance that requires you to pay a percentage of the medical bill. Your medical insurance could cover 80% and you would be responsible for 20% of the bill. These plans particularly have an out-of-pocket maximum which would be the most an insured would have to pay before insurance kicks in to pay 100%. These limits are subject to an annual accrual.
Some medical insurance plans have coverage limitations. This may mean that the plan will only cover expenses up to a given dollar amount for a certain service. It could mean that the plan has an annual or lifetime limit for benefits for the insured. Once the limit has been reached, there are no more benefits paid by the insurance company and the policy holder will then be responsible. These limits are usually pretty high especially if the limit is a lifetime limit.
One last thing you should be aware of is that most plans have some exclusions. These are services or tests that will not be covered under your plan. An example may be that some plans do not cover maternity at all or during the first year of the policy. Another service that may be excluded could be services for mental health.
It is very important to compare the costs and the benefits of the policies carefully when you are ready to choose your health insurance.