The Basics of Health Insurance

Life is full of unexpected and sometimes unpleasant surprises. Among them is an accident or serious illness, that drains a family's or individual's personal resources, forcing them into financial difficulty they may struggle to recover from. That's why a smart consumer looks at health insurance as an investment in, and protection of, their future.

Instead of asking yourself "Do I really need it?" or taking your good health for granted, it's wise to look at what health insurance can give you, and what you actually do need it for. First, consider some of the following:

· marital status
· age, and the ages of your dependants
· personal health history
· your parents'/family's health history

All of these things can help determine whether you need to anticipate an increased need for coverage in the future, or whether the plans you look at, are sufficient to give adequate coverage for your present circumstances.

Who finds themselves having to shop for health insurance plans? In general, they are individuals that:

· have found their employer's plan is too expensive
· are not covered by an employer's plan
· have insufficient coverage under their workplace plan
· have no coverage under their spouse's health plan
· left regular employment and their plan was terminated
· finds new employment, but the health plan does not kick in immediately

Types of Health Plans

The two primary types of health insurance, are Health Maintenance Organizations (HMO's), and the "fee for service".

The intention of HMO plans, is to deliver health care in an organized and efficient manner. This means that when you enrol in an HMO plan, you will be required to choose from among their pool of health care professionals, for the services you need. Despite some restrictions, "managed care" as it is known, does offer flexibility in payment options, as well as such areas as continuing health care under a professional you are seeing before taking out their plan. It is important to fully understand what an HMO plan will cover, since there may be preventative treatments included, while what seem like necessary services, are not.

If you want more say in who you seek treatment from, you should look for a "fee-for-service" plan, where you choose the health care professional you want to see. After each visit/treatment, you will be billed the costs of their service. Depending on your plan, and the treatment received, your plan covers part or all of the cost.

The Costs of Your Health Insurance

When you have studied the types of health plans available, and have determined the level of coverage you need, the next step is to look at the financial commitments. With all policies, you will pay premiums. That is a monthly fee, which basically buys you membership in the plan. It does not go towards covering any specific treatment or service.

The next financial factor in health insurance coverage, is the deductible. This is the amount that you must pay, before your coverage kicks in. In that respect, it is the same as auto or home insurance. However, it can be a major expenditure, before you get any coverage, since many plans require the figure to be paid in a given year before they start contributing to your health care costs. That could mean that you pay for all your health care for ten months, and in the last two months of the year, have only occasional need for medical care, for which the company pays some of the expenses. On the other hand, there are companies with no deductibles, or who levy them only on certain services/procedures.

The final consideration in cost, is co-insurance or co-payment. All medical insurance companies will require you to agree to one or the other, and sometimes both. Co-insurance means that you will pay a designated percentage of your health care costs, while co-payment sets a predetermined dollar figure on each service. These amounts are in addition to any deductibles.

Balance the potential total of what health insurance will cost you, against what the company will pay, and choose the one that offers the most advantages. After all, you are taking out the plan to protect yourself against a financial burden, so your health plan should not create a burden in place of it.

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