Monday, December 17, 2012

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Tuesday, December 9, 2008

Health Insurance Can Be Funny

Health Insurance 101: Part 1

Here are some basic terms from Wikipedia:

Premium: The amount the policy-holder pays to the health plan each month to purchase health coverage.

Deductible: The amount that the policy-holder must pay out-of-pocket before the health plan pays its share. For example, a policy-holder might have to pay a $500 deductible per year, before any of their health care is covered by the health plan. It may take several doctor's visits or prescription refills before the policy-holder reaches the deductible and the health plan starts to pay for care.

Copayment: The amount that the policy-holder must pay out of pocket before the health plan pays for a particular visit or service. For example, a policy-holder might pay a $45 copayment for a doctor's visit, or to obtain a prescription. A copayment must be paid each time a particular service is obtained.

Coinsurance: Instead of paying a fixed amount up front (a copayment), the policy-holder must pay a percentage of the total cost. For example, the member might have to pay 20% of the cost of a surgery, while the health plan pays the other 80%. Because there is no upper limit on coinsurance, the policy-holder can end up owing very little, or a significant amount, depending on the actual costs of the services they obtain.

Exclusions: Not all services are covered. The policy-holder is generally expected to pay the full cost of non-covered services out of their own pocket.
Coverage limits: Some health plans only pay for health care up to a certain dollar amount. The policy-holder may be expected to pay any charges in excess of the health plan's maximum payment for a specific service. In addition, some plans have annual or lifetime coverage maximums. In these cases, the health plan will stop payment when they reach the benefit maximum, and the policy-holder must pay all remaining costs.

Out-of-pocket maximums: Similar to coverage limits, except that in this case, the member's payment obligation ends when they reach the out-of-pocket maximum, and the health plan pays all further covered costs. Out-of-pocket maximums can be limited to a specific benefit category (such as prescription drugs) or can apply to all coverage provided during a specific benefit year.

Capitation: An amount paid by an insurer to a health care provider, for which the provider agrees to treat all members of the insurer.

In-Network Provider: A health care provider on a list of providers preselected by the insurer. The insurer will offer discounted coinsurance or copayments, or additional benefits, to a plan member to see an in-network provider. Generally, providers in network are providers who have a contract with the insurer to accept rates further discounted from the "usual and customary" charges the insurer pays to out-of-network providers.

A Guide To Individual Health Insurance

Top 5 Individual Health Insurance Questions

1. Why do you need health insurance?

As medical care advances and treatments increase, health care costs
also increase. The purpose of health insurance is to help you pay for
care. It protects you and your family financially in the event of an
unexpected serious illness or injury that could be very expensive. In
addition, you are more likely to get routine and preventive care if
you have health insurance.
You need health insurance because you cannot predict what your
medical bills will be. In some years, your costs may be low. In other
years, you may have very high medical expenses. If you have health
insurance, you will have peace of mind in knowing that you are
protected from most of these costs. You should not wait until you
or a family member becomes seriously ill to try to purchase health
We also know that there is a link between having health insurance
and getting better health care. Research shows that people with
health insurance are more likely to have a regular doctor and to get
care when they need it.

2. How do you get health insurance?

Most people get health insurance through their employers or
organizations to which they belong. This is called group insurance.
Some people do not have access to group insurance. They may
choose to purchase their own individual health insurance directly
from an insurance company. Many Americans get health insurance
through government programs that operate at the national, State,
and local levels. Examples include Medicare, Medicaid, and
programs run by the Department of Veterans Affairs and
Department of Defense.

3. What is individual health insurance?

If you are self-employed or your employer does not offer health
insurance, you may not have access to group insurance. You may,
however, be able to purchase individual coverage directly from an
insurance company. When you buy your own health insurance, you
will be responsible for paying the entire premium rather than
sharing the cost with an employer. You should shop around to find
a plan that fits your needs at a price that you are willing to pay.

Most self-employed workers are able to deduct their health
insurance premiums from their Federal taxable income, providing
them with an important tax saving. Most States also offer similar
tax preferences. If you are self-employed and buy individual health
insurance, you should consult a tax advisor to find out if you are
eligible for this deduction.
Insurance plans differ greatly from one company to another and,
within an insurance company, from one plan or product to another.
Some plans have multiple products (options) from which you can
choose; read carefully through the “fine print” to be sure you
understand the various choices.

Welcome informed consumer.....

My hopes from this blog is to showcase the best individual health plans and how to choose a plan wisely. At then end of the day, the key is to inform the consumer and ultimately drive the costs of health insurance down while driving quality up.