In today’s uncertain world, health is a primary concern for every single person, no matter what one’s social standing is. Not surprisingly we find a lot of people dieting, exercising, doing yoga, or even following a crazy mix of different workouts to get back in shape or to remain in good shape. In this melee, we often forget that our financial health is equally important, if not more important, especially during our times of illness. This is because healthcare costs keep rocketing year after year. The time-tested adage, “Health is Wealth” proves truer than ever today.
Even a short hospital stay can become an expensive affair. Modern healthcare has also increasingly become dependent on a slew of sophisticated investigations and therapeutic measures, which cost a lot of money. Thus, the need for health insurance to cushion the blow of ill health and its financial impact.
What is Health Insurance?
Health insurance provides the much needed crutch to tide over your illness with a sound financial backing. Simply put, health insurance assures payments to a person in the eventuality of sickness or injury and works as a protection scheme. Usually a person or his/her employer buys a health insurance policy to provide for healthcare needs.
Health insurance is particularly of much value to low-income and middle-income groups, particularly those who can barely meet their basic necessities like food, shelter and clothing. It provides hope to them by supporting their medical needs, which otherwise would cost a bomb. Health insurance provides access to a network of specialists, doctors, hospitals and other healthcare resources at a much lower cost, especially when appropriately negotiated by the insurance company.
To get to know your health insurance plan better, read on to understand few of the basic things about health insurance.
Understanding Common Terms in Health Insurance
- Premium: Premium for your Health Insurance is the amount that you pay monthly. You will have to pay your premium regularly, regardless of whether you use your health insurance plan.
- Deductible: It is the set amount you pay each year before your health insurance plan starts to pay for your covered services. Basically, it is the amount you will pay toward your health care costs before your insurance cover kicks in.
- Covered Services: Most health insurance plans have a few basic covered services which include ambulatory patient services, emergency services, hospitalisation, maternity and newborn care, mental health and substance abuse disorder services, prescription drugs, rehabilitative services, laboratory services, preventive and wellness services, and paediatric services among many others.
- Out-of-Pocket Limit: This is a protective feature that limits the maximum amount you pay for covered services each year.
- Copay: If you choose a plan with copay along with a deductible, you only need to pay the copay for most doctor visits. Your insurance covers the rest.
Which type of health insurance do you have?
Much too often, most people do not go into details of their health insurance policy. Health insurance coverage can be either sponsored by an individual, family or by an employer.
- Individual Health Insurance: If you pay the premium for your health insurance, you probably have an individual health insurance plan. It may even cover illness of your family members.
- Employer Health Insurance: If your employer – the company or the government pays for your health insurance, you have an employer health insurance.
There are also different kinds of health insurance plans each tailored to meet different needs with their own special features. Some of them are:
- Health Maintenance Organisation (HMO): These have a network of providers that you must use in order to be covered and not pay additional costs. If you have your own choice of doctors, ensure that they are in the HMO that you are planning to subscribe. One common issue with HMO is that they do not work beyond their “service area”.
- Preferred Provider Plan (PPP): Similar to HMO, they have a network of providers but they go one step ahead by providing cover for even out-of-network providers.
- Major Medical or Indemnity Plans: These provide services with any licensed health provider, and a good plan if you do not have the option of HMO or PPP.
The key thing to remember is that you should choose a plan that best suits your needs and means.
Considerations Before Purchasing Health Insurance
- What is your situation? Do you need health insurance just for yourself or for your whole family?
- How healthy are you or your family members? If you or any of your family members is sickly and often need a doctor, you might need a comprehensive cover for that particular illness. If all of you are relatively healthy, you might do well to get a comprehensive health cover that provides for your basic needs.
- Check if your present doctor is included in the Health Insurance Cover. If you haven’t made a choice yet, it might be wise to find a doctor or hospital of your choice under the insurance cover you are considering.
- Consider your budget. Plan out how much you can pay for your health insurance.
- Does your health insurance plan provide financial benefit in the form of subsidies? It could save you quite a bit of money.
It is always better to be aware than to be sorry. If you have any doubts regarding your health insurance, it is always better to clear it with your insurance provider. Although a comprehensive health insurance cover is sufficient for most individuals, you might want to get a critical illness insurance cover to provide for specific illnesses.
Remember that employer health insurance may be insufficient in certain circumstances and has to be supplemented by a more robust individual health insurance. Lastly, with the hope that health is by your side, keep yourself financially protected by a health insurance that provides for all your basic health needs.