Health Insurance Ideas

Privacy Policy

The Health Insurance Policy

 

 

There will be a huge amount of detail here about what a health insurance policy contains and pays for, so don’t feel bad if it seems a little bit overwhelming at first, many people do. Just read the information a few times over, and you will begin to understand the concepts in no time.

 

The first thing we will discuss is Co-Insurance. Co-insurance is the cost sharing amount between the insured, you, and the health insurance company. You may be familiar with the terms 90/10, 80/20, or 70/30.

 

What these figures represent is the dollar amount up to your maximum out-of-pocket limit, you are responsible for should a health insurance claim become necessary. If you have $15,000 operation, with a $5000 deductible 80/20 plan with a $10,000 out-of pocket maximum, you would have to pay $7,000 for your share of this health insurance claim.

 

It works like this. First you would have to pay the deductible of $5000, bringing the operation balance down to $10,000, then because you have a 80/20 plan, you are responsible for 20% of the balance, up to your out-of-pocket maximum of $10,000 with the health insurance company picking up the other 80%. In this case you would have to pay 20% of the $10,000 balance, which equals $2,000. The health insurance company pays the $8,000 balance.

 

Annual Plan Deductible. This is exactly like it sounds, it’s the dollar amount you are responsible for, before your health insurance benefits begin to pay. Deductible amounts can range from zero to $25,000. A $5,000 deductible plan is rather common these days. Keep in mind when you are shopping for health insurance, the greater your deductible, the lower your monthly premiums will be.

 

Out-of-pocket Maximum. I have already touched on this a bit, but I will explain it in more detail here. Your out-of-pocket maximum, is the maximum amount you are responsible for should a large health insurance claim become necessary. Out-of-pocket maximums also have a large range of dollar amounts. Like a deductible, the greater your out-of-pocket maximum, the lower your monthly health insurance premium. A quick side note here, some health insurance companies include your deductible into your out-of-pocket maximum amount, others do not. Make sure you know which way your health insurance provider handles this.

 

Lifetime Maximum and Annual Maximum. Pretty straight forward here. It’s the maximum dollar amount a health insurance company will pay on your behalf. Make sure you know if your health insurance policy has a lifetime maximum, or a annual maximum. Many limited benefit health insurance plans have an annual maximum, most major medical plans will have a lifetime maximum. To make matters worse, now days some health insurance companies have developed both an annual and lifetime maximum benefit into their plans. I would advise a lifetime maximum plan with no annual maximum over a annual maximum plan. If you have a 200,000 operation, and a health insurance policy with a $50,000 annual maximum, you’re on the hook for the other $150,000.

 

 

 

 

 

 

Office Visits. If you use the services of a doctor on a regular basis office visits are pretty important for your health insurance policy. Office visits are handled In many different ways. I will only explain a few here. Some health insurance companies will allow unlimited office visits, others limit them to 2 per person per year. Some health insurance companies allow them at the beginning of your coverage, others require a waiting period of 90 days to six months before you can use the benefit. This is one area in a policy where you can save some money. If you purchase a policy with unlimited office visits, trust me, there already built into your monthly premium. If you rarely visit a doctor, I would suggest a policy that limits the visits to two a year, or a policy that doesn’t even cover office visits. The difference between plans can be $35 to $75 a month for your office visit coverage.

 

Preventive care. Don’t confuse preventive care with office visits. Just because your health insurance plan offers preventive care, doesn’t automatically mean your plan has office visits. Many health insurance companies offer some kind of preventive care benefits now. It’s also not uncommon for them to limit this coverage to a 90 day, six month, or even a 1 year waiting period before this benefit begins. Limits of $200 to $300 per person per year are a common benefit.

 

Psychiatric Care. Unfortunately, most people don’t realize they don’t have psychiatric care coverage in their health insurance policy, until it becomes necessary for the coverage. Not only does this benefit normally cover inpatient and outpatient services, but many health insurance companies won’t even cover the prescription drugs necessary for treatment if your health insurance policy doesn’t have psychiatric benefits. I would recommend a policy with psychiatric coverage, a mental illness can strike at any time, and many times the prescription drugs used to treat mental disorders are rather expensive.

 

Emergency Room and Urgent Care Benefits. Most health insurance policies will have coverage for both. A separate deductible for each is common. Urgent care is usually a $75 to $100 deductible. Emergency Room care  deductibles are usually more expensive, $250 to $500 is common. Many health insurance companies will waive these deductibles if you are admitted to a hospital for the event that brought you the the emergency room in the first pace. However, most policies require you must be admitted within 24 hours for them to waive the deductible.

 

 

We’re almost done I promise.  Click here to continue