Features & Benefits Of A Health Insurance Policy

Last year was a nightmare for every human being as the entire globe was hit by a pandemic called Covid-19. A year later and we’re still living in fear of the virus that doesn’t seem to be going away any time soon. The consequences attached to contracting the virus are severe for someone with pre-existing health conditions and if affected, the medical expenses to cure an individual are not affordable particularly because there is no one medicine for the virus.

It is common knowledge that an individual without health insurance, in need of medica treatment is either not taken care of completely or has to pay a large sum to get access to medical aid. If neglected, there could be serious repercussions on one’s health and finances. Not just that, good health contributes to the natural flow of things in an individual’s routine and if obstructed, it could even lead to loss of professional, mental and physical balance. If one wants to live a stress-free life without the interference of medical issues, one must definitely look into investing in health insurance long term.

Health insurance is a financial backup to pay for expenses incurred from medical services and is an important decision to make in one’s life as the right insurance will cover all your expenses and not leave you penniless. As essential as health insurance is, it can also be expensive if you don’t pick the right policy for yourself. Let’s say you’re a resident of Anaheim, you must know that health insurance in Anaheim is a legal requirement as stated by the Californian law. If any person does not have health insurance in Anaheim, they can be penalised for the same.

The key features of a health insurance policy are listed below;

Premium

A premium is an amount fixed by you or your employer (if you are on a health plan picked by your boss) with the insurance company for a time period set mutually to have accessible healthcare. The sum you pay towards premium for your insurance policy also determines how much you pay out of your pocket.

Out-of-pocket amount

The payment made by any insurance policyholder towards coinsurance, copays and deductibles is called out of pocket amount. The maximum out-of-pocket expense for a policyholder corresponds to the maximum amount he/she pays for health insurance services per year. The cap on the amount of out-of-pocket ensures a limit on the cost borne by a policyholder.

Deductible

The sum you pay for healthcare out-of-pocket before your insurance kicks in is called deductible. It so happens that insurance policies with lower premiums tend to have higher deductibles and often, even though a policy holder has paid the deductible, they have to pay for the copays and coinsurance till they have topped out their out-of-pocket amount. Now the different between out-of-pocket and deductible is that out-of-pocket is the total amount you pay for towards medical care including your deductible whereas deductible is some of the amount you pay till your insurance starts paying. For example, lets assume you need medical care costing $3000 and your deductible is $1000, your insurance company won’t pay anything till you’ve met your deductible amount of $1000.

Copayment

A copayment, also known as “copay,” is a fixed amount one pays for in addition to their premium for a certain service or prescription medication. Meaning, some health insurance plans have copayments for a visit to a doctor, prescription drugs, etc before one meets their deductible amount whereas some insurance companies split the amount with you after you’ve met your deductible.

Coinsurance

Another way insurance companies split costs with a health insurance policy holder is coinsurance. Coinsurance is a percentage of the cost one pays, for covered services. For example, if you’ve met your deductible and your health insurance plan’s allowed amount for an office visit is $200; your coinsurance amount of 20% would be $40. Your health insurance plan would pay the remaining 80%, or $1600. Some plans also allow you to split it as 70/30 or 90/10.

The benefits of having health insurance are many but the ones that all insurance policies must provide are as follows;

• Ambulatory patient services (outpatient care one receives without being admitted to a hospital)
• Emergency services
• Hospitalization for surgery, overnight stays, and other conditions
• Pregnancy, maternity, and new-born care
• Mental health and substance use disorder services
• Prescription drugs
• Rehabilitative and habilitative services and devices (treatment and devices that help people gain or recover mental and physical skills after an injury, disability, or onset of a chronic condition)
• Laboratory services
• Preventive and wellness services, as well as chronic disease management
• Paediatric services, including dental and vision coverage for children

The conclusion is that one should not even consider not having a health insurance policy because medical services are not cheap and to have access to even basic services is essential to leading a stress-free life.

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