Health insurance is partial medical coverage based on monthly premium payments. Health insurance companies pool the risk between all of their customers to determine how much the rates will be for each of their customers, which is why insurance costs can vary so widely between companies.
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In addition, there are many different health insurance options and costs vary between them. Your age, family history and general health can affect your rates, so it can be very difficult to determine just how much your health insurance costs will be without getting a quote based on your specific needs and situation.
Your Health Insurance Options: Group, Private and State
There are currently three options available to you in terms of health insurance. You can purchase group health insurance through your employer, private insurance from an insurance company or, if you qualify, free or reduced cost health insurance through your state.
As you can imagine, there are quite a lot of health insurance combinations that you can purchase from an insurance company because you can include or exclude virtually anything that you want to change the costs and coverage that you receive. In addition, you can choose from a wide variety of medical payment caps. These caps can be as specific as limits on how much an insurance company will pay for specific conditions, such as heart disease, cancer, etc. or as broad as how much your annual lifetime maximum coverage options are for all services.
The truth is that if all of this information were laid out for you in one place, you would be reading about your options for days. So, instead, let’s talk about the most common choices there are for health insurance so that you can understand at least the basics when it comes to choosing your health insurance.
Group Health Insurance
Group insurance, as mentioned above, is insurance that is purchased through an employer. Currently your employer chooses how much of your health insurance that they pay for and how much you pay for out of pocket. In 2014, when the national health plan law takes affect, employers will be required to pay at least 60% of your annual health care premiums for your group health insurance.
Group insurance companies accept all applicants through an employer and do not require physicals from applicants. In addition, they usually cover pre-existing conditions that private insurance simply won’t cover unless the applicant became a part of a high-risk pool. If your employer covers a 60% to 80% of the premiums, then this could easily be the most affordable option for you. This is especially true if you have a lot of health issues.
Most group plans are HMOs, PPOs or POS plans because these are the most affordable options for employers. This does, however, mean that your health plan will be more restrictive because these are managed care plans that work out of networks for your care.
Private Health Insurance
Your second option is to purchase private health insurance. Private health insurance can be costly as well, but typically the higher cost comes with more flexibility and options in terms of doctors, hospitals and the care that your receive. When choosing private care, you can choose an indemnity plan, an HMO, PPO, POS, or partial plans such as long-term care insurance, catastrophic care insurance, physician only insurance and so on.
An indemnity plan offers you all of the flexibility that you could want from an insurance plan. The catch is that you pay a high premium for this option. If you are single, the premiums might be manageable, but if you add a family you may find that this option quickly becomes unaffordable; that is why so many people choose a managed care plan.
Managed Care Plans
Managed care plans are HMOs, PPOs and POS plans. The insurance companies that sell these plans negotiate with doctors and hospitals for the lowest possible prices for supplied services. For example, an x-ray might cost you $250 out of pocket or the same company might charge your insurance company $125 for the same service.
The benefit is that you get much more affordable insurance because of their negotiating skills. The downside is that you have fewer options, you have to choose your doctors from within networks and some, like HMOs, are very restrictive about seeing specialists and have to approve your lab work, hospital stays and so on.
In the past, you could only get managed care options through group plans. As time has gone by, however, insurance companies have changed these plans to accommodate the individual because so many people simply can not afford the more expensive indemnity option and want more than a plan that covers specific types of medical care.
As you can imagine, partial care plans are much more affordable, but there are very strict limits on what type of care you can receive as well as how much the insurance company is willing to pay annually to your doctors, hospitals, etc. Before you purchase one of these plans, you need to know exactly what you are getting.
State and Government Health Insurance Options
In order to qualify for government health insurance, you will have to make under a specific amount of money each month. This amount varies from state to state and the amount is usually affected by your family size. For example, a family of five can make more monthly and still qualify for government health insurance than a family of three.
Medicaid is a state funded program that is designed for people who make less than the national poverty level. Medicare is federally funded and is usually reserved for the elderly or the disabled. There are very strict rules and restrictions for those who qualify for either or both of these programs.
If you have children, most states have a state funded program that allows for children from virtually any income level to receive health insurance. If you meet the income requirements this insurance is free. If you make more than the income requirements, you may have to pay an annual fee (usually very low, $50 to $100) and a small co-pay for doctors visits and medications.
If you want to know if you qualify for any of these programs, visit your state’s official website.
Buying Health Insurance
Buying health insurance is a process. If you want private health insurance, you will likely have to submit to a physical after getting your initial quote and expressing an interest in an insurance policy. How the physical is administered depends on the health insurance company that you use.
In most cases, however, you will find that an insurance company will accept a physical from any licensed doctor. In some cases, they will provide you with a list of acceptable doctors for you to choose from. There are also some instances that an insurance company will send a medical professional to your location to administer blood tests.
Getting a quote is very easy if you decide to use a free quote tool, such as the one you can link to on this page. Quote tools make it easy for you to get rate estimates from several companies rather than trying to gather information from one company at a time. Again, you will have to finalize the process with the insurance company, but you can get started right here, right now.
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