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Understanding Health Insurance

Introduction

A normal health insurance policy is essentially an agreement between the policyholder and the insurance company to compensate for all or some of any covered medical costs incurred.

Who Benefits?

All who currently have no coverage will benefit from even the most minimal of plans.

Health Insurance Types

• Coverage from Employers: This protection is available through one’s employer; the worker and employer then share in the premium costs. Depending on the employer, the level of coverage paid by the company will vary.
• “Obamacare” Health Plans: Understanding that Obamacare, aka the “Affordable Care Act”, may very well be eliminated or drastically altered in this current political climate, these plans are still available. Depending on the state one can obtain plans through the state marketplaces where families and individuals can sign up and then be responsible for paying premiums, either in full or in varying levels depending on subsidies awarded due to one’s income (or lack thereof).
• Plans from the Government: These coverage options consist of both Medicare and Medicaid plans. Medicare plans are provided to individuals 65 years and older and to those who are disabled. Medicaid plans are made available to low income people. Medicare part A is usually offered to those who qualify free of charge, while Medicaid is free or with a nominal premium payment.
• Catastrophic Coverage: These low-cost premium, high deductible plans offer help when one faces “catastrophic” circumstances. With these plans, one is financially supported in the case of extreme cases of injury and illness.

How it Functions

Depending on the plan one opts to purchase, coverage will be subject to varying levels of deductibles, coinsurance and co-pay payments. One’s deductible is the amount paid prior to the insurance company providing any compensation for medical costs. Coinsurance is the expense you share with the insurer in covering said costs. For instance, an office visit is often charged to the policyholder making it a 90/10 split. In this instance, the policyholder pays 10 percent and the insurer provides the remaining 90 percent. A co-pay is a fixed flat charge that one pays for services, often being anywhere from $5 to all the way up to $100 depending on the nature of the service needed and one’s insurance provider.

Big Benefits

Carrying good health insurance means that the person covered will normally pay far less than the insurance company and this means dramatically less funds out-of-pocket. Having coverage also means that preventative care is often provided at no cost to the insured within a certain network of providers. Finally, there is the invaluable peace of mind in knowing that you and your family are protected should some kind of illness or injury strike.






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