As the costs of health care continue to rise it has become essential for many people in the United States to have some form of health insurance. This insurance can help them to remain healthy without having to pay a fortune for it. However, health insurance is extremely confusing. The paperwork can intimidate even the most intelligent people. What kind of coverage is offered, the various expenses, and even the terminology used can be daunting for anyone to face.
So just what is health insurance? Basically, it’s a promise by an insurance firm or health plan to pay for various health care related services and procedures. They do this in exchange for the premium payments that are made by the policy holder. Health insurance is a collective with a large pool of people all paying their share of premiums. This helps the company to ensure they can provide the coverage to all their policy holders. Not everyone will use as much of their coverage as everyone else. The premiums paid by these people help to cover the expenses of treating those that are very ill.
Health insurance can be offered by for-profit or non-profit companies. It can also be offered to consumers through social welfare programs or other governmentally funded programs. They may only offer major medical coverage, or offer other services including disability, long-term care, or specialized needs. Health insurance can be offered to employers, who will then offer it to their employees, or it can be purchased on an individual basis. Each company and health insurance policy is different. This can make finding the right policy for your needs more difficult, but not impossible.
The Franklin Health Assurance Company of Massachusetts was the first firm to offer accident insurance in the United States in 1850. By 1890 the origins of sickness coverage had begun to emerge. In 1911 the first employer sponsored group disability policy was issued. These developments created the foundation of what would become the modern standard of health insurance.
Most health care policies today cover a variety of health services for their policy holders. This can include things such as routine and preventative care, health care procedures, and prescription drugs. However, the coverage does vary from company to company.
All health insurance policies are contracts between the company and the policy holder. These policies can be quite large and use many different forms. Usually each policy will contain a section in the contract title Evidence of Coverage. This is where all the costs that the policy covers will be explained in detail. This is essential reading for anyone considering a health insurance policy.
As health insurance policies have continued to evolve they have introduced many new terms to the American lexicon. Understanding the various terms will help anyone with a health insurance. The health insurance premium is the cost that a policy pays each month for their health care coverage. The deductible charged is the amount that the policy holder needs to pay before their coverage kicks in. These are expenses that must be paid before the insurance will spend a dime on your care. Other terms that people need to understand include co-payments, coinsurance, exclusions, and coverage limits. These are just a few of the many phrases that are commonly found in health insurance policies. Be sure to research anything that you don’t understand. Even a slight misunderstanding can result in higher costs for you.
Companies such as HMOs prefer to offer health plans instead of health insurance. These plans can include other types of companies such as preferred provider organizations and point of service plans. Each of these is a bit different in the options and benefits it provides to their members. Other health plans that can be purchased are pre-paid health services. These will normally pay for a set amount of procedures or doctor visits.
There are still more types of health insurance that you can choose from. A comprehensive policy will pay for a percentage of any hospital or physician costs, after the deductible has been met. They may also require a co-pay for certain services. Most commonly people will have to pay these co-pays for doctor visits, but an insurance company may include other health care services as well. Scheduled plans are simpler, providing basic services to the policy holders. Many times these plans require membership in an association that is different from the health care industry such as the National Association for the Self Employed. While these plans do offer some benefits they are very limited and should not be depended upon in the even of a major emergency or illness.
Confused yet? Don’t feel bad, you’re definitely not alone. Health insurance can be one of the most difficult things for a person to understand. With so many different options available the search for the right policy can seem like an exercise in futility for many people. This article has only touched on some of the things that make up health care insurance. By learning more about what health insurance is you can gain the confidence you need to all the coverage you need.
Health insurance can be very confusing for anyone to understand. A simple overview of some of the most common terms is presented here.