Health Insurance

Health insurance helps you pay medical bills, sometimes including prescription costs, eye and dental care.

Terms
Deductibles The out of pocket expense that you agree to pay. This amount may range from $100 to as high as a few thousand dollars. You can lower your premium by increasing your deductible. Consider your health history and how often you expect to invoke your insurance. If you think you are unlikely to use your insurance often, you may want to consider a higher deductible. If you expect to need medical care more often, you may want to pay a higher monthly premium in order to have a lower deductible each time you receive care.

Co-payment The amount of money you pay each time you use medical services. You may have to pay between $5 and $20 each time you visit your doctor. Larger medical expenses may require you to pay 20% to 30% of the cost and the insurance company will cover the remainder. Usually, there will be an out of pocket expense limit.

Lifetime maximum benefit This is the maximum amount a policy will pay in your lifetime. You should look for a policy that has a benefit limit of at least $1,000,000. The best policies will offer unlimited lifetime benefits.

Renewal provision Guaranteed renewal provisions ensure that your policy cannot be cancelled as long as you are paying your premiums. The insurance company must be renewed and you can only increase premiums for an entire class of individuals. This prevents companies from increasing premiums for a specific individual that has made large claims.

Types of health coverage
There are primarily two types of health insurance plans. An indemnity plan allows you to choose your doctor and use any hospital that you choose. This is usually the most expensive type of coverage and often doesn't cover preventative care such as check-ups, though it will cover major medical expenses.

Managed care plans include Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs). HMOs give you preventative and medical services from one group of doctors. You usually pay a co-pay of $5 to $20 with each visit. HMOs usually offer the lowest premiums but the least choice when selecting doctors.

PPOs provide a list of doctors with whom they have arranged a special discounted fee. This type of plan allows you a little more freedom in choosing your doctor. You usually have a co-pay and you can see a doctor not on the provider list but you must pay a higher co-pay as well as other possible additional charges.

   [ Next ] Public Medical Care