What is Health Insurance and How Does it Work?

Health Insurance is a must when securing the financial future of your family.

Medical bills are the number cause of bankruptcy in the United States.  So if you do not have health insurance you need to not only get a policy, but make sure you are getting a policy that meets your financial needs.

This health insurance guide is here to get you up to speed so you can make the best decision for your family,

What is Health Insurance?

The cost of medical care in the United States is high. A stay in a hospital as a result of even a minor accident can cost thousands of dollars. More serious issues, such as a major surgery, can easily add up to hundreds of thousands of dollars. Health insurance is there to help pay for those unforeseen emergencies. Depending on the level of coverage you have, it’ll pay for all or most of your medical bills. You can opt for coverage for day-to-day medical expenses, hospital expenses, or a combination of the two.

Policy Components

The components of health insurance are pretty simple. You’ll need to pay:

• Monthly premium: Like with any other insurer, you’ll need to pay for coverage upfront. If you have the funds to do so, find out if paying an annual premium in advance would get you a better deal.
• Deductibles: Adding a deductible can be an effective way to reduce your premium. This is the amount that you’ll have to pay before the insurance kicks in. The amount of your deductible will depend on the plan that you are on.
• Co-Payments: Some plans have co-payments, some don’t. The idea is that every time you go to the doctor, hospital, or fill a prescription, you pay something towards it. Your co-payment can range from $10 to $50 and comes into effect after you reached the amount of your deductible.
• Co-Insurance: Co-insurance covers a percentage of your total costs. It applies to hospital stays or surgeries. It will also apply if your doctor checks up on you while you’re in the hospital.

Types of Health Insurance

There are currently two different sorts of health insurance in the United States – private and public.

• Private: Private insurance is the more expensive option but also one that might offer more extensive and customizable cover. Depending on the plan that you choose, you’ll have access to the medical practitioners and care facilities of your choice.
• Public: Medicare is an example of public health insurance. You do still pay a monthly premium, but the state helps to subsidize your healthcare. This gives those who are unable to afford private insurance access to proper medical care.

There are various types of health insurance plans within these categories as well. They are:

• Indemnity plans: An indemnity plan sets a predetermined rate and pays out accordingly. That means that you can choose whichever practitioner or medical center that you like. Anything that is over and above the rate set by the insurer will be your responsibility.
• Health Maintenance Organizations: Also known as an HMO, health maintenance organization care for the insured directly. In this case, you will have to choose a medical practitioner that works with the scheme. Coverage is usually minimal, but adequate. It’s also cheaper.
• Preferred Provider Organizations: PPO plans allow you to choose the treatment option that you like. You’ll have to choose from a range of preferred providers. If you want to go outside of the network, the plan may still cover you, but not to the same extent.
• Point of Service: POS plans are a hybrid of a PPO and an HMO. You can decide to have the treatment arranged through your primary care doctor, but you’ll be able to choose between using the network or going out of network.
• Gap Coverage: This coverage comes into play after your insurer has paid their portion. Let’s say that your insurance only pays 80 percent of all your medical bills. That means that you pay 20 percentpaid by you. Gap insurance can make up that shortfall.

Why You Need Health Insurance

As mentioned before, health care in America is costly. On a day-to-day basis, if you’re a reasonably healthy person, you might feel that it’s unnecessary. After all, if you’re only going to see the doctor once or twice a year, it seems like a waste of money to get more comprehensive insurance.

Health insurance, however, is more about dealing with those large, unexpected medical emergencies. What if you’re involved in a car wreck? What if you have a heart attack? Medical bills add up frighteningly fast in these instances.

If you’re over sixty-five and qualify, you can use Medicare. If you’re in a low-income household and qualify, you’ll also be able to get Medicaid. For the average person, with a decent job and good income, you’re on your own though.

The consequences of not being able to pay your medical bills can be severe. Let’s say that you need to have cancer treatments, for example. These are extremely expensive. Unfortunately, the medical practitioner is not under any obligation to treat you if you can’t pay.

You’d have to look into borrowing money, wiping out your savings, and possibly even selling your house if you don’t have insurance.

Even if you’re willing to roll the dice with some health issues, there is always the possibility that you might need emergency medical care. Health insurance should be factored into your financial planning. It will help you to get the care that you need and protect your financial future.

Getting Health Insurance Quotes

Health insurance is highly regulated at the state level.  This means getting quotes needs to be done only in the state you live.

Fortunately, instead of having to go to multiple health insurance agents, the internet has made it possible to shop for quotes from all the top companies in your area.

eHealthInsurance.com makes it super easy to shop with multiple carriers and insure that you are getting the same or similar health coverage while you shop from policy to policy.

Top Companies for Health Insurance

Because of the highly regulated nature of health insurance, recommending any one or group of top health insurance companies is difficult, when there may be as many as 50 different answers to the questions.

Instead we decided to put there of the the top aggregaters of health insurance quotes.

• eHealth – Probably the most well known health insurance quote engine, eHealth has a long history of top rated health insurance quotes.
• Agile –  Offering term life insurance plans, Agile can give you low rates on plans for specific periods of time.
• RateFetcher – With an easy to use interface, Ratefetcher.com is a top choice for getting multiple quotes from insurance carriers in your area.

Health Insurance Guide Bottom Line

Health insurance is something that might seem like a bit of a luxury item when things are going well health-wise. It’s when something goes wrong that you see that it is one of the types of insurance you must have.

Medical bills can add up fast. Hospitals are not in the credit-extension business. If you don’t have health insurance, you’ll be required to pay something and to eventually pay off the entire bill. If you don’t your credit will be trashed.

Health insurance may not be cheap, but it’s no longer a luxury item either. If you want the very best care for yourself and your family, you’ll have to find a way to work it into your budget.