Health insurance is a way to pay for health care. It protects you from paying the full costs of medical services when you fall sick or get injured. Just like home insurance or vehicle insurance, you choose a plan and agree to pay a certain amount (known as a premium) each month. The health insurer in return agrees to pay full or a portion of your covered medical costs. There are different types of health insurances from which you can choose. The features of all the health insurance plans are different. Some of the health insurance plans are specifically meant for critical illnesses.


Health insurance covers cost of an insured individual's medical and surgical expenses. Subject to the terms of insurance coverage, either the insured pays costs out-of-pocket and is subsequently reimbursed or the insurance company reimburses costs directly.

Medicare or medical costs are rising year on year. As a matter of fact, inflation in medicare is higher than inflation in food and other articles. While inflation in food and clothing is in single digits, medicare costs usually escalate in double digits.

Breaking Down Health Insurance
Health insurance can be tricky to navigate. Managed care insurance plans require policyholders to receive care from a network of designated health care providers for the highest level of coverage. If patients seek care outside the network, they must pay a higher percentage of the cost. In some cases, the insurance company may even refuse payment outright for services obtained out of network. Many managed care plans require patients to choose a primary care physician who oversees the patient's care and makes recommendations about treatment. Insurance companies may also deny coverage for services that were obtained without preauthorization. In addition, insurers may refuse payment for name-brand drugs if a generic version or comparable medication is available at a lower cost.

Insurance plans with higher out-of-pocket costs generally have smaller monthly premiums than plans with low deductibles. When shopping for plans, individuals must weigh the benefits of lower monthly costs against the potential risk of large out-of-pocket expenses in the case of a major illness or accident. Health insurance has many cousins, such as disability insurance, critical (catastrophic) illness insurance, and long-term care (LTC) insurance.

TYPES OF HEALTH INSURANCE

There are two main types of health insurance:


Private health insurance:
The Centers for Disease Control and Prevention (CDC) say that the U.S. healthcare system relies heavily on private health insurance. In the National Health Interview Survey, researchers found that 65.4 percent of people under the age of 65 years in the U.S. have a type of private health insurance coverage

Public or government health insurance:
In this type of insurance, the state subsidizes healthcare in exchange for a premium. Medicare, Medicaid, the Veteran's Health Administration, and the Indian Health Service are examples of public health insurance in the U.S.

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HEALTH INSURANCE BENIFITS
HEALTH BENEFITS
Ideally, your plan enables you to receive medical treatment whenever it is needed. Some insurers cap your annual number of primary care visits, while others are more lenient and allow you to schedule as many appointments as you deem necessary. Before enrolling in a new plan, it’s important to establish if there are any restrictions regarding primary care visits and, if so, exactly how many physician visits you are allowed.

COSTS
Are you a generally healthy individual who is content to visit the doctor for a yearly check-up? Then a high-deductible plan with a low premium might be your most cost-effective option.

Do you have a pre-existing condition that requires a large amount of treatment, therapy, and/or prescribed medication? If so, you probably want a low-deductible plan; you’ll pay higher monthly premiums, but save more money on out-of-pocket expenses in the long run.

Why is the type of insurance plan important?
The type of plan dictates how an individual will approach getting the treatment they need and how much money they will need to pay on the day.

In 2003, the U.S. Congress introduced a new option, the Health Savings Account (HSA). It is a combination of an HMO, PPO, indemnity plan, and savings account with tax benefits. However, a policyholder must pair this type with an existing health plan that has a deductible of over $1,100 for individuals and $2,200 for families.

HSAs can top up coverage, extending existing plans to cover a wider range of treatments. If an HSA is paid for by an employer on behalf of their employees, the payments are tax-free. An individual can build up funds in the HSA while they are healthy and save for instances of poor health later in life


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