Health insurance is like any other forms of insurance policies where people pool the risks of having any medical expenses or requirements in future. Health insurance policies are available with the private concerns as well as under state and government. Side by side different non-profit organization manages the profit of the insurance policies under their organization.
Health insurance is again of two types – the individual health insurances and the group health insurances. Group health insurances are available under organization or a company which provides the benefits of the policies under the health insurances to their employees. In exchange the government provides the organization with certain tax benefits.
There are normally the following things to know in any insurance for health:
Premium: This is paid by the policy holder to the policy provider. It is usually paid on a monthly or on quarterly basis. It is dependent on the deductible and the co-payments.
Deductible: This amount is paid by the policy holder as well. For example, a policy holder of a plan might need to at least pay about $500 in a year, before the health insurer providers cover the expenses of the medical cure. It might take several visits before one reach the full amount of the deductible. After that limit is reached, the insurance company starts paying for the particular care.
Co-payment: This amount is paid by the policy holder as well. This is paid before the insurance provider starts paying the expenses of the service. For example, the policy holder is required to pay $60 dollar to the doctor or when they are obtaining prescription. This co-payment will be done each time they acquire the service.
Co-insurance: Besides paying for the co-payment, an insurer may be also required to pay a certain amount of money as co-insurance. This is a percentage of the total cost of the policy holder. For example an insurer is required to may 30% as co-insurance. At this stage if they undergo any surgery they will pay 30 % of the cost while the insurance company will pay 70 percent. It is over and above the cost of the co-payment.
Exclusions: All different services under the medical service which are not covered under any single insurance policy are exclusion. At this stage, the insurer has to pay the full cost of the service.
Coverage limits: Certain insurance companies pay for a particular service only to a particular dollar amount. The excess charge is paid by the policy holder. Certain companies even engage this limitation to the annual charge coverage or to lifetime charge coverage. The beneficiaries are not paid if the service charge exceeds the mentioned limit.
Out-of-pocket maximums: This is similar to coverage limit, but in this case the insurer’s out of the pocket limits ends, instead of the insurance provider’s limits. Insurance company pays the remaining charge.
Capitation: Capitation is the amount paid by the policy holder to the policy provider in exchange of which the policy provider agrees to cover all the expenses of the insurer’s member.