This is the insurance against the risk of incurring medical expenses. Depending on the type of health insurance cover, the insured individual can either pay the medical costs, out-of-pocket and is then reimbursed, or the insurer can simply make the medical payments directly to the provider. Health insurance is a contract between the
insurance provider which can be an insurance company and an individual or his sponsor. The health insurance contract can be renewable either monthly or annually; it can also be a lifelong in the case of private insurance. The type and the amount of health care costs covered by the health provider are specified in writing, in a member contract or “Evidence of Coverage’’.
insurance provider which can be an insurance company and an individual or his sponsor. The health insurance contract can be renewable either monthly or annually; it can also be a lifelong in the case of private insurance. The type and the amount of health care costs covered by the health provider are specified in writing, in a member contract or “Evidence of Coverage’’.
Types of Health Insurance Cover:
- Private health insurance
These are the most common and they are health plans offered by employers to their employees. Private health insurance can also be purchased by an individual.
- Public health insurance
This is a government funded health care.
- Catastrophic health insurance
This is one of the least expensive forms of health insurance. The insured individual pays out-of-pocket before the insurance plan begins paying. Such policies are only suitable for the individuals with the financial means to handle the routine illness and the hospitalization.
How health insurance coverage works
The insured is supposed to pay a fixed amount to the insurance provider, usually monthly. Some health insurance policies only pay for health care up to a certain amount. The insured person will be expected to pay the charges in excess of the health plan’s maximum payment for a specific service. Other insurance company schemes have an annual or a lifetime coverage maxima; hence they will stop the payment once they reach the benefit maximum and the policy-holder pays the remaining costs. The insurer also does not cover all the services as there are exclusions and the insured is expected to pay the full cost of the non-covered services out of their own pockets.
Heath insurance can also involve co-payment which is the amount the insured individual must pay out of pocket before the health insurer pays for a particular service. Instead of, or in addition to the co-payment, there is also the percentage of the total cost that the insured person may pay, this is known as the Coinsurance. The insured might have to pay 20% of the cost of surgery over and above a co-payment, while the insurer pays the rest 80%.
Reasons you should have a health insurance policy
- Preventive care
The individuals with health insurance cover are much more likely to use it for receiving the annual check-ups and also other diagnostic tests that can need serious medical conditions early when they are still treatable. As the research shows, the people with health insurance cover are found to be physically and mentally healthier.
- Being uninsured may have impacts to many
The individuals with no insurance cover tend to wait until their health condition
worsens and use the emergency room to get care. This may result to large bills that will affect the whole family of the individual.
worsens and use the emergency room to get care. This may result to large bills that will affect the whole family of the individual.