Let’s be clear about what actually health insurance is. It is all about your wellness and its maintenance. Basically, health insurance is an investment that you make for your sudden medical setbacks. For you, it is a family health coverage that pays for all of your injuries, illness, disabilities, or in short, for your and your family’s medical, surgical, and dental expenses.
Health coverage is provided by a private health insurance company, not by the government or any state. The person who is buying it signs a legal contract with the health insurance company. The policyholders, when once sign the contract, they have to provide a certain amount of money to the company to ensure and secure their coverage for medical treatments.
These payments are known as ‘premium’. When you pay that amount, the insurance company makes sure that you don’t get stuck or run out-of-money, covering any medical emergencies.
Why do you need it?
Health policy is essential for every individual unless you are wealthy enough to take charge of yourself and your family on your own. Well, nobody decides to get sick or get into a severe accident, right? The policy saves you from unexpected medical bills like a leg injury during a football match or a three-day stay at the hospital due to some random illness, which can be approximately $30,000. Without a policy, you get to pay for all the bills, while with an insurance policy, you will have to pay for half or maybe nothing. Not just hospital bills, but also they pay for your prescribed drugs.
With health insurance, you can obtain free preventive care like diabetes, vaccines, screenings, and blood pressure check-up and not merely for yourself but can also receive full family health coverage.
There is no doubt that medical emergencies can cost you thousands of dollars in a day, especially when they are the unexpected ones. If you are at a good health stage or taking preventive care, then you may want to skip the idea of health insurance. But life is all about surprises, and you never know when it can surprise you with a sudden medical mishap. Have you ever heard of appendectomy? It is the surgical removal of the appendix, which can cost you as much as $33,000 if you are uninsured. And with insurance, you may just have to compensate for just half of it.
You should have a health insurance policy so that you can prevent any case of bankruptcy or high-cost medical bills.
How does it work?
A health insurance company helps you to pay for all kinds of medical emergencies. It pays for your hospitalisations and secures you from unwanted high-cost bills.
Talking about how does it work, let’s suppose you recently suffered from a severe accident which costs you close to $50,000? Now, if you are lucky enough to have health insurance, then your insurance company will make sure to pay for all your bills, where you may have to pay around $6,000 depending on your deductible and coinsurance.
Insurance policy clears that anyone who receives medical care outside the network nominated by the insurance company will not get paid for their bills and medications.
It is possible that the company may also decline to pay for medicines that are available at a lower price. The policyholder is provided with all this information and conditions in the given contract by the insurance company.
Some important terminologies
Health Insurance contains some important terminologies or components, which are the basic terms that can help you to understand what health insurance is. And so, you can pick up the perfect insurance policy plan for yourself.
- Premium is the amount of money that you pay every month for purchasing an insurance policy. It is the money that keeps your health coverage fully active. In order to secure yourself from any kind of medical setbacks, you have to pay a monthly premium for your medical treatments so that you can receive the insurance money at the time of need. The less premium you pay, the more you get to pay for your medical bills. It means that premium is the amount of money that you pay for your better health coverage. Now what’s in it that you won’t like; is that you have to pay this total every month even if you are not hoping to need your insurance money any time soon? And not only this, but if you don’t pay that certain amount of money before the due date, the insurance company will have the right to string up your coverage.
- Deductible is the amount of money that you have to pay annually so that you can with that insurance company. It is the amount for your health care services. You have to pay the deductible before the company has to share the cost for your medical treatments. If you pay a high amount of deductible, then you get to pay less for your premium. Or vice versa. Your deductible amount can vary from $500-$10,000 a year, depending on your company’s health insurance plan.If your yearly deductible is $10,000, then until you somehow end up in the hospital with the bills in your hands. Remember that the company will not be paying your bills unless they sum up to $10,000.
- Copayment is an amount that you pay every time you visit a doctor for a checkup. Let’s suppose that the copayment of seeing a dermatologist is $30, and then you have to pay this certain amount on every visit, despite the amount of the actual fee. In easy words, if you and your insurance company agreed on the copayment of 20%, then you have to pay 20% of the amount of money whenever you visit to see a doctor.
Health insurance may sound alike for rich or wealthy people only, but it is more likely about life, healthcare, and the ways to protect it with less spending on medications for everyone. Health insurance is serious for every individual in order to secure themselves and their families from any sudden medical conditions.
Dennis Relojo-Howell is the founder of Psychreg.
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