Health Insurance... What you need to know!!!

Health insurance has been on everyone's minds these days.  You see it in the news and you hear about it on the radio, and you probably have heard people talking about it at work or in a restaurant.  But the real quesiton is, how much do people really know about their health coverage?

Words like "deductible", "co-insurance", "pre-existing conditions" "major medical vs limited indemnity plans".  Where do you start?  Today's post will be dedicated to what I call the "health insurance well of knowledge" or lack thereof.

What is a deductible? In insurance policy terms, a deductible is the amount of money which the insured party must pay before the insurance company's own coverage plan begins.  In other words, you must pay 'x" before your insurance will pay for anything.  This amount can vary per policy, usually the less you pay on your monthly premium, the higher your deductible is.  Also, keep in mind your deductible is reset every year!!!

What is co-insurance? Co-Insurance is the amount of the bill that you are also responsible for after your deductible is met. So let's say your bill is $10,000 (to make it easy) and your deductible is $5000.  You pay your deductible FIRST, which brings your total amount due to $5,000 of which your co-insurance is 20% (sometimes can be as high as 30%).  20% of $5,000 is $1,000.  So after paying your deductible and your co-insurance (in this example), your out of pocket for this $10,000 medical bill is $6,000.  The insurance company pays the rest.

What is a pre-existing condition? this is a medical condition that was present BEFORE you purchased your insurance.  It can be a serious condition, such as Asthma or Diabetes, or even a simple issue like Eczema.  Either way, the insurance company can do a couple of things.
1.  Deny you coverage- basically saying your too much of a risk to insure.
2.  Rate your application- when they rate your application, it basically means your more of a risk to insure so you have to pay a higher monthly premium.
3.  Put a waiting period (usually 12 months)- which means if you need to use your health coverage for that condition (that was there before you got the coverage) then your insurance coverage would not cover those expenses until the waiting period is over.
4.  Rider out your pre-existing condition- the insurance company can say "we'll approve your coverage" but you can NEVER use it for that illness or health problem. 

What is Major Medical/Catastrophic Insurance? Major Medical Insurance is health insurance that most people are used to.  You can get it through your employer or on your own through a licensed health  insurance agent.  It usually has Co-Pays for Dr visits, prescription drugs and Emergency Room visits.  It will always have a deductible and most of the time will also have a co-insurance too.  It covers regular visits to the Dr or Specialist, labs, x-rays and hospitalization.  You can either be on an HMO or PPO network (depends on the plan you choose). And most people don't realize this, but it also comes with a lifetime cap of about 3-5 Million Dollars.  This is the most common type of coverage that people know about and can be very expensive. 

What is a limited Indemnity Plan/Limited Benefit Health Insurance? Limited Health Insurance can also be called "guaranteed issue".  This is also True Health Insurance.  This coverage is great for those with pre-existing conditions that can't get coverage elsewhere.  These types of plans are very affordable compared to the Major Medical plans, and most have NO DEDUCTIBLE.  The idea behind these plans are to make your out of pocket expense as little as possible.  Some offer NO waiting period for pre-existing conditions, many offer very good coverage for your dollar.  There is usually 3 or 4 tiers or types of plans for each company, the higher you pay the more coverage you get, so you can usually find a plan that fits your budget and your needs at the same time.  This if for the everyday, I need to see a Dr or get an x-ray type of coverage.  Most have decent hospitalization coverage in case of an accident and most offer stackable benefits, which makes these plans very attractive.  See an example of this type of plan here http://www.myhomelandhealth.com/ . 

This was just a basic overview of health insurance and what to look for.  The best way to find the plan that best suits your needs and your budget at the same time is to speak directly to an INDEPENDENT LICENSED INSURANCE AGENT.  This person, is not tied or captive to one company.  They can literally shop around for you.  And remember, insurance rates are fixed on the federal level, so one agent can't offer you a discount on the same plan compared to another agent, they MUST offer it at the same price.  Just find an agent that you trust and remember to ask questions. 

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