Health insurance is possibly the most important aspect of a person’s life and is the difference between medical coverage and not being able to go to the doctor when sick or for a checkup. Health insurance is used to pay for medical expenses, which would cost an arm and a leg without insurance. At least with insurance the majority of medical expenses are covered by the insurance companies and the patient only has to pay a nominal fee called a co pay.
Health insurance also encompasses long term nursing or custodial care and disability. Health insurance is provided for fulltime workers (40 hours per week) by an employee’s employer. Insurance can be purchased by corporations or by individual people. Health insurance may also be provided by the federal government through different programs such as welfare.
There are nine keywords that are involved with health insurance that every policy holder needs to know to understand their coverage.
A premium is the amount of money a policy holder pays to the insurance company each month to obtain the coverage.
The deductible is money paid out of pocket by the policy holder for doctor visits or prescriptions before the insurance policy pays its share of the bill.
Policy holders make a copayment whenever they visit a doctor for a checkup or purchase a prescription. The policy holder might have to shell out $15 out of pocket to pay for a visit to their physician but the insurance company will pay the remainder of the bill, which could be anywhere from $50 to $400.
Sometimes a policy holder has to pay a coinsurance. A coinsurance is when the policy holder pays a percentage of the total cost of the service(s) provided instead of paying the fixed amount (copayment). This could lead to the policy holder having to pay a very small fee or a very large fee; depending on the percentage determined by the insurance company.
Each insurance policy has exclusions. Exclusions are predetermined services that are not covered in the plan. If a policy holder has a service performed that is an exclusion then the policy holder will have to pay for that service in full, without the help of the insurance company.
There are coverage limits involved in most insurance plans. The majority of coverage limits deal with how much of a service the company will pay for. Once the company pays for the amount agreed upon the policy holder will then have to pay the remainder of the bill.
On the other hand, there are limits for the policy holder too. They are called out of pocket maximums. Once the policy holder reaches the maximum amount of money paid out of his/her pocket for services, the insurance company has to pay the remainder of the bill.
Capitation is an amount of money that an insurance company pays to a medical care provider for promised care of all the insurance company’s policy holders in return.
The final term involved with health insurance that all policy holders should know is in network provider. An in network provider is a preselected health care provider on a list of providers put together by the insurance company. These in network providers provide medical care for a discounted price per a pre arranged agreement with the insurance company.
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