When you’re dealing with health insurance, we know that that information can be overwhelming — and it’s even more so when you’re on your own and not working with a “real” broker.
That’s why we’ve put together this post to help break down the process, including what health insurance is and how it works, all so you can better understand the ins and outs of this industry.
Health insurance is financial protection arranged by an insurance company that is meant to reimburse your medical expenses, should they arise. The most common types of health plans are also known as “medical policies” and differ significantly in terms of the services covered and the cost, benefits, and limitations of coverage. This financial protection frees you from having to pay full billing for all medical expenses.
The most common types of health plans are known as “Medical Pools”, including HMOs and Medical Catastrophic Plans. These plans typically pay for all major clinical services as long as you follow some guidelines, while they cover little-to-no procedure expenses (including Emergency Rooms).
The flip side is that they often do not cover many preventive or diagnostic services such as routine checkups or the cost of an annual physical exam.
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What does health insurance usually cover?
Many people are surprised to find that health insurance isn’t just limited to hospital stays, but instead covers dozens of other things, like dental care, prescription drugs, and mental healthcare. So if you’re looking for affordable health care protection your company’s benefits administrator may not be able to provide you with the coverage you need.
There are so many choices it can be easy to feel overwhelmed at first. You might get health insurance from your employer, or from a plan sold on your state’s exchange, but you might also be eligible for Medicaid. You may be covered by Medicare, or by the National Health Service Corps (NHSC).
So what exactly does health insurance cover? There are more than 60 different benefits listed in the Employee Benefits Security Administration’s list of “essential health benefits.” These range from coverage of maternity care to mental healthcare. (You can read more about what each benefit covers here.
Here are a few of the more popular coverages.
1) Prescription drugs. Prescription drug coverage is incredibly important since medications can be quite expensive and some of them are necessary for life. Fortunately, most health insurance plans include prescription drugs, although the level of coverage varies widely from plan to plan. Some plans will pay for almost everything while others will have fairly high co-pays or even require that you pay the full price for most prescriptions until you reach your out-of-pocket maximum (see below).
2) Mental healthcare. Many people are surprised to find that mental health care is covered in most health insurance plans. This can be incredibly important. For example, a study by the National Institute of Mental Health found that 43 percent of all Americans will experience a mental health problem, such as depression or anxiety, each year. Fortunately, many health insurance plans will pay for some or even all of your mental healthcare costs.
What does health insurance not cover?
Below are some of the types of services that Health Insurance does not cover;
- Vein surgery
- Cosmetic surgery
- Elective surgeries
- Alternative medicine
- Weight loss surgery
- Unapproved medical care
- Experimental treatments or procedures
Who needs health insurance?
Do you know the statistics? One-third of people who buy health insurance will never file a claim. But they pay hefty premiums for years until their policies lapse. It’s the same with life insurance: two-thirds of people don’t get any benefit from such policies because they die soon after buying, or they die without leaving any heirs at all.
To be sure, this pattern is not confined to health insurance, life insurance, or any other type of insurance. It’s true for automobile and homeowners’ policies as well. That’s because most people buying policies today know little about what they are paying for and why. And it’s hard to have a discussion about the merits of a policy when the main thing you are trying to do is avoid paying for it in the first place.
So while we’re rightly pleased to know that health insurance remains affordable, we should also know that it is still not a good deal for most of us. There are four reasons for this:
- The low deductible limits. Most people have deductibles of about $1,000. If your premium is more than $2,000 and you don’t qualify for an exception to the deductible rules, you must pay the full amount until you reach it. Over 80% of health claims occur after the deductible. So in future years, you may have to pay premiums for years without much chance of an actual claim.
- The exclusions for preexisting conditions. Apart from specified preventive care, most plans exclude services related to a pre-existing condition for 12 months after the policy takes effect. The more expensive the policy and the older you are, the longer this exclusion lasts—it can go on up to 36 months or even permanently.
Benefits of having health insurance
- Peace of mind
- $0 preventive care
- Lower out-of-pocket costs
- Coverage for unexpected costly medical care
What do I do if my health insurance is too expensive?
If you’re struggling to afford the cost of your health insurance, or you just want to get a better idea of what health insurance might cost, this article will help explain your options. The process is simple: find out how much health insurance costs for different plans in a given area and compare them side-by-side. Then, decide what’s best for you! Find out how much it costs and more about why it’s worth every penny. Health insurance is not a luxury, it’s a necessity.
The average individual spends 3.8% of their income on health insurance. But if you’re a single man younger than 65 making more than $34,000 a year, you’ll spend about 11%. On the other hand, someone making less than $14,00 will pay less than half that amount – under 5%.
For most people, health insurance costs ten percent of their income or less. If you’re in that group, and you don’t qualify for any federal subsidies, then your cost might be as low as 3% of your income.
Even if the cost of health insurance is not a problem for you, it doesn’t mean it’s not important to know. Depending on where you live, it can be a good idea to get a handle on current market rates before figuring out what health insurance is worth paying for.
What is Health Insurance?
Most health insurance plans cover both diagnosis and treatment. Therefore, many plans are designed to cover your costs for doctors’ visits, hospital stays, and even prescriptions. Health insurance covers the expenses you might incur in case of accidents, illnesses, or other routine or preventable health events that occur during the course of a year (e.g., childbirth, cancer screenings).
Is not having health insurance bad?
In the year 2016, about half of US households are uninsured. This number is near an all-time high because people cannot afford to purchase health insurance due to costs rising 4% per month on average. Moreover, only 20% of those who have health insurance actually have employer-based coverage that is affordable for most people.
The Affordable Care Act offers subsidies for those living below 400% of the federal poverty level so they can afford health care without having to pay more than 8.16%.
We hope you enjoyed our blog about health insurance. We understand that health insurance can be tricky and confusing, especially if you don’t have someone to help you navigate through it. However, you can use these tips to make health insurance more manageable on your own.
If you have any questions, please don’t hesitate to reach out to us firstname.lastname@example.org. Thank you for reading, we’d love to hear from you!