Personal Health Insurance
For the 50 million Americans living without the benefit of health insurance, the issue of getting quality healthcare is a serious one. Many are forced to go without routine care, and others face bankruptcy over appalling medical bills.
Part of the problem is due to an assumption that personal health insurance is expensive and offers few benefits. While this is certainly true in some instances, there are good plans available. The key is in understanding how insurance works and knowing what benefits are needed.
Personal health insurance is bought and paid for by an individual. The coverage extends to themselves and their immediate family. This differs from the group health insurance offered by some employers. The key differences are:
- Personal insurance is regulated by the state in which coverage is sought.
- The benefits tend to be less extensive than that of group health coverage. This is because they are governed by different sets of laws.
- Personal health coverage can be denied or limited due to a preexisting medical condition.
The cost of personal health insurance is what holds many people back. However, many things factor into the price. The most important is an individual’s health status and age. This is why it is so important to obtain coverage and maintain it while healthy.
The individual applying is categorized into a rate class based on their health history, along with their geographical location and type of work. This rating determines how much the monthly premium will be for different plans. There can also be limitations on the policies for preexisting conditions and exclusions for pregnancy.
The deductible is the amount that a person must pay before insurance kicks in. The higher the deductible, the lower premiums will be. For example, if someone chooses a plan that has a $5000 deductible, it will result in a lower monthly payment but he or she will have to pay that amount before the policy offers coverage.
In these situations, a health savings account is an optional consideration. In addition to putting aside the money for a deductible, there are also significant tax breaks available from the government.
Co-payments and Out-of-Pocket Expenses
Paying more money out-of-pocket for medical expenses lowers the premium. This applies to higher co-payments and limiting coverage that is unlikely to be used. It is beneficial to have a cap on the amount that the insured is required to pay.