A health insurance plan covers medical costs incurred due to an accident, chronic condition, or injury. Individuals can obtain such a policy in exchange for monthly or annual premium payments for a set period. In United States, employers frequently provide health insurance as part of a benefits package, whereas Medicare and Medicaid offer health insurance coverage to the elderly and low-income citizens. Important points to remember:
- The health insurance coverage pays for the insured’s medical and surgical expenses.
- Choosing a health insurance plan can be difficult due to restrictions on in- and out-of-network services, deductibles, copays, and other factors.
- Affordable Care Act has prohibited insurance companies from denying coverage to patients with pre-existing medical conditions, and children can stay on their parent’s insurance policy until the age of 26.
- Medicare and the Children’s Health Insurance Program (CHIP) are two public health insurance programs that serve older people, children, and disabled persons.
Understand US Health Insurance
Americans need health insurance to cover the rising healthcare costs. You generally require it until you can afford to pay for your healthcare or obtain government assistance. The very wealthy can afford the cost of even exceptional emergency or ongoing medical care. A single doctor’s office visit may cost hundred dollars, and an average three-day hospital stay can run tens of thousands of dollars depending on the services provided. When you pay your premium, your health insurance provider agrees to assist you with your medical bills. You may not have medical costs every month, but if you do, your coverage will be there to help split the bill, as long as you’ve met your deductible. In United States, there are numerous types of health insurance plans and numerous rules and care arrangements.
How To Choose A Healthcare Insurance Program
There are different types of common health insurance terms you must be familiar with. Before you choose, Health insurance companies offer numerous options; you must sort through different combinations of deductibles, copays, coinsurance, and premiums.
Premium
A premium is an amount you or your employer pays to an insurance company for a set period. Your premium amount is determined by your place, age, number of dependents, tobacco use, and plan category.
Copays
Copay is the fixed amount depending on the type of healthcare services you receive. A co-payment is a fixed amount you charge for covered healthcare services such as doctor’s visits, specialist visits, or prescriptions.
For example, a $30 copay may be needed for a doctor’s visit, with the rest covered by the insurance company. Higher premium plans usually have lower copays and vice versa.
Deductible
A deductible is an amount you must pay for covered healthcare services before your health insurance plan starts paying. If the deductible is $2,000, you would be responsible for $2,000 in healthcare expenses each year, after which the insurance company would begin paying its portion. Keep in mind that the deductible may not apply to all services.
Coinsurance
Coinsurance is the percentage of healthcare costs you pay after you have met your deductible. For example, if you have a 20% coinsurance, your insurance provider will cover 80% of all costs once you have met your deductible. You could save 20% ($200) on an MRI that costs $1,000. Coinsurance is typically lower in higher-premium plans.
Out-of-pocket Costs
The out-of-pocket cost refers to the portion of your medical expenses you must pay when you receive care. Once this limit is reached, your plan will cover the entire cost. It excludes premiums, expenses not covered by your plan, out-of-network care, and expenses for a service that exceeds the allowable amount.
Preferred Provider Organization (PPO)
A preferred provider organization (PPO) is a popular health insurance policy for families and individuals. A PPO plan is a type of health insurance plan that allows you to receive care inside or outside a specific provider network.
Preferred providers plan have health care facilities and practitioners who offer discounted services to the insurer’s plan policyholders. Identifying a primary care physician (PCP) with a PPO plan is not essential; you can see other providers in your network without a recommendation. If you’re looking for a new health insurance plan and thinking about a PPO, make sure your current doctors and specialists are in the PPO network for that plan.
Health Maintenance Organization(HMO)
HMO plans provide a wide range of health care services through a network of providers who agree to provide service to its members. A Health Maintenance Organization plan usually requires selecting a primary care physician (PCP). If you have an HMO plan and want your plan to cover your healthcare costs, you must choose an in-network doctor. HMO plans covers the treatment referred by a primary care physician and have negotiated fees for provided medical services to reduce costs. That is typically the least expensive type of plan.
Health Savings Account (HSA)
A Health Savings Account (HSA) is a tax-deductible account that you can use to pay for existing and future eligible medical expenses. You can use an HSA to save for medical expenses or supplement your retirement funds through self-directed investment choices. Funds in your HSA account can be invested and used to pay for qualified medical expenses over time. If you do not spend your HSA funds, they will roll over into the following year.
What Is The Procedure For Receiving Insurance Payments?
When your doctor bills your health insurance company, it will include the total cost of your visit, excluding any payments you made while you were there. When your insurance company receives bill, this is what usually happens (though you should double-check with your insurance company for specifics):
- Someone will review the bill for the correctness and determine whether your policy covers the services listed on the claim.
- Then they’ll see if you’ve paid your deductible or reached your annual out-of-pocket maximum.
- Your insurance company pays your doctor straight once they have determined how much they owe, relying on your deductible, coinsurance, and out-of-pocket maximum.
- They will also send you an Explanation of Benefits (EOB), explaining what they compensated for and why.
- After your physician receives the money from your insurance, they will send you a bill for the rest. Check to see if the bill you received from your doctor meets your EOB. If bill and EOB do not match, you may need to contact your doctor and insurance company to determine what you owe.
Healthcare system in the United States is extremely complex and costly. We understand that it’s normal to feel like you’re putting more into your health insurance than you’re getting out of it, but understanding your coverage gives you control.
