Health Insurance » Medical Expenses

Health Insurance 101

admin — Tue, 19 Jan 2010 09:14:58 +0000

Health insurance is a kind of insurance wherein the insurance company pays the medical costs of the insured individual if the individual in question falls ill due to covered causes, or due to accidents. The insurer may be a private organization or a government agency. The major purpose of health insurance is to cover medical expenses and any lost income while the individual is not well and unable to function normally.

There are different types of health insurance policies. The two most common ones are major medical and disability insurance. A major medical health insurance policy provides benefits for sickness or injury, irrespective of whether the care is provided at a doctor’s office, clinic or hospital. The types of sickness and injury covered are typically broad, although there are always limitations that you may want to discuss with your agent prior to purchasing the coverage. Major medical policies normally have an annual deductible and a lifetime maximum amount of benefits that will be paid.

Even if you are covered by a group insurance at work, you might consider taking an individual policy if you may change jobs soon, or if certain benefits that are not provided in the group policy.

A deductible is an annual amount that you will have to pay per insured person, before the insurance company begins to pay on your bills. There is an upper limit for the maximum amount of deductibles you will have to pay in a given year.

In a health policy, coinsurance refers to the percentage of the medical bills that the insured individual will have to pay after the deductible is met. Usually the health policy would have a provision called a ‘stop-loss’ – this is the maximum amount you will have to pay for covered medical bills.

By: Chris Tolamalu

What is Catastrophic Health Insurance Coverage?

admin — Sun, 17 Jan 2010 11:19:31 +0000

A major or catastrophic medical insurance plan, although being rather speculative, is fairly cheap but is also deductible. The money that you pay up from your own funds before the insurer meets the balance is the deductible.

As an example: if you have a deductible set at $5000 and your visit to a hospital results in a bill of $12, 000 your insurance provider will pay $7,000 only towards the bill and you meet the balance. On this type of cover, the larger your deductible is, the smaller the premium. By taking up this option, you will be gambling on not needing any major medical expense soon.

It would be a reasonable gamble. One survey that was conducted showed that in the US, 90% of the population has medical expenses less than $2000, and for 73%, their expenses were less than $500 per annum.

Two main groups favor the catastrophic health insurance: the young who are in their 20’s who feel their health is not at risk and elderly men between 50 and 65 who would be waiting on Medicare eligibility.

The catastrophic health insurance plan is designed to cover only against major hospital expenses rather than day-to-day medical expenses. It will not normally cover doctor’s visits, maternity care, or prescription drugs. The cover usually excludes mental health conditions, substance abuse and some pre-existing medical conditions.

This catastrophic health insurance plan can be bought as a group plan or on an individual basis. Of late, many organizations have started to encourage their employees to take up this type of cover. The highest lifetime limit can be as much as $3 million.

Rates do vary on age and the area in which you live. In some states the savings on premiums can be up to two-thirds. As an example: a female of 21 years, non-smoker, could have a monthly premium of only $30.

Before taking a decision to select this cover, get some professional advice from agents, insurance companies or both and compare quotes.

By: Jack Adams

Why Having Health Insurance is Crucial

admin — Thu, 14 Jan 2010 16:45:30 +0000

If you’re struggling to make ends meet, you might think you can save a little money by canceling your health insurance policy. While this can certainly save you some money on your immediate monthly expenses, canceling your health insurance coverage or failing to purchase health insurance can have devastating long term effects.

Avoiding Financial Catastrophe

Perhaps the most important reason to have health insurance is to avoid bankruptcy if and when, you develop a major medical problem. The reality is that major health problems like cancer or other serious conditions can cost millions of dollars to treat. If you don’t have insurance coverage in place, you will be stuck having to pay these expenses out of your own pocket. And if you find yourself unable to pay these expenses, you may be forced into bankruptcy or to follow other drastic measures to repay the debt.

Expediting Recovery

When you’re sick or injured, worrying about how you’re going to pay your medical expenses can actually slow down your healing process. After all, the added stress brought on by excessive worry can wear out your body. In addition, you may be tempted to skip certain beneficial medical procedures in order to save money. As a result, you may prolong your suffering, and fail to meet successful treatment. With health insurance coverage in place, you don’t have to be as concerned about finances and you can concentrate on healing instead.

Planning for the Future

Failure to have a health insurance plan in place while you are younger can make it difficult if not impossible for you to obtain health insurance when you get older. This is because most health insurance companies will not provide coverage to a person with a pre-existing condition, a health issue the person had before seeking health insurance coverage.

If the insurance company does issue a policy to someone with a pre-existing condition, that condition may be excluded and the cost of the premiums will be much higher than they would be for someone without a pre-existing condition. If you already have an insurance policy in place before the condition develops, on the other hand, you don’t have to worry about trying to obtain coverage at a later date.

While everyone is aware that the cost of health insurance is on the rise, you truly cannot afford to not have coverage. By shopping around and choosing a policy that only provides you with the coverage you need, however, you can keep your costs affordable while keeping yourself protected.

Discussing your options with a qualified insurance professional can save you grief, worry and money.

By: Steven Klein