Health insurance seems to be ever changing, different employers offer different insurance solutions for their employees, and there are lots of different types of coverages so it can be hard to keep up with all the changes. It is important to have a basic understanding so that when time comes to purchase an insurance policy you know that you are getting a good deal and sufficient coverage. For this reason, many decide to use health insurance brokers jacksonville fl, or wherever they live in order to get the plan that suits them most. This article will go over the fundamentals of health insurance so that you can be prepared.
What is Health Insurance?
Basically, health insurance is a policy that you purchase to help pay for any medical expenses that you incur due to illness or injury. When you purchase a policy you make an agreement to pay the insurance company a certain amount each month and in return for that payment they will pay for a percentage of any medical expenses that you incur.
Health Insurance Terms
As you go through the process of trying to find coverage, you will come across a lot of different health insurance terms. It is important that you understand them. The better you understand what these terms are and how they work for you, the more likely you are to purchase the best insurance policy available. Here are some of the most common terms that you may encounter:
- Premium: This is the amount that you have to pay to the insurance company each month to keep your health insurance policy active. If you do not keep up on your premium you will lose your health care coverage.
- Deductible: This refers to the amount of medical expenses that you will have to pay yourself before the insurance company will start to cover expenses. For example, if you purchase a policy that has a $2,000 deductible, you will have to pay $2,000 of medical expenses straight from your pocket before the insurance company will come in to cover costs. This amount resets every year, however, there are some plans available that have no deductible.
- Coinsurance: This term refers to the percentage of your medical expenses that you will have to pay and the percentage of your expenses that the insurance company will cover. Coinsurance kicks in after you have covered your deductible. Generally speaking, the lower percentage that you have to pay, the higher your monthly premium will be. Here is an example of how coinsurance works: if you have 80/20 coinsurance (meaning the insurance company pays 80% and you pay 20%) and you receive a bill from your doctor for $100 the insurance company will pay $80 of it and you will have to pay the remaining $20.
- Copayment: Your copayment, or co-pay, refers to a flat fee that you pay for specific services. Your insurance policy will list what services have a co-pay and if they do; what those amounts are. If you have a copay for a service, you will not have to pay any coinsurance for it, you will just have to pay the copay. For example, if you have a $25 copay for a doctor’s office visit, you will only have to pay that $25 and the insurance company will cover the rest.
Types of Insurance Plans
Now that you understand the basic terms of coverage it is important that you understand the different types of insurance plans that are available to you, take note that most plans are area specific, Health Insurance In Maryland will vary to New York, this much should now come as surprise to any one.
- Health Maintenance Organizations (HMOs): If a plan is an HMO it will have its own network of doctors and hospitals. As an enrollee of the Plan you will have to only visit the listed doctors and hospitals if you wish to have your expenses covered. If you have an HMO you will be required to choose a Primary Care Physician, or PCP. Once you have chosen this doctor you will have to use them to get referrals to see any other specialists. What does this mean for you? Let’s say you are having some concerns regarding your heart, you would first have to make an appointment to meet with your PCP who would then refer you to a cardiologist, if necessary. This is opposed to you scheduling the appointment directly with a cardiologist. Not all HMOs have PCP requirement, so if it is something that is of concern to you be sure to bring it up with your insurance agent so they can find a plan that fits your needs.
- Preferred Provider Organization (PPO): A PPO works much like an HMO in the regards that each company has their own network of doctors and hospitals that you have to choose from. However, unlike an HMO, you can choose to see an out of network doctor, you will just receive reduced coverage. PPOs also differ from HMOs in that they do not require you to have a PCP or seek referrals before going to see specialists.
Now that you have an understanding of the fundamentals of health insurance you are better equipped to go out and find a plan that will best suit your needs and your budget. Check back often for more articles on health insurance.