The components of Health Insurance

The components of Health Insurance

Insurance

By
Mo

A human body is made up of cells, which are the basic and functional unit of life. The alteration to the functions of the cells will affect the whole body. It may result in illnesses, injuries and several other medical setbacks that may demand medical attention via hospital visits or surgeries, depending on the severity of your medical setbacks. 

The medical attention you will need via hospital visits and surgery may come at an astronomically high price you can not afford without a loan. However, health insurance can cover these expenses you incur from surgical treatment and hospital visitation without threatening your financial stability. 

How to get health insurance?
If you are one of the few people new to health insurance and wondering about how to get health insurance, there are three ways in which you can get health insurance with or without the need of analyzing several insurers' health insurance quotes. You can get health insurance:
as an employee benefit, which is called employer-sponsored health insurance 
from government-controlled health insurance programs, such as Medicare and Medicaid 
by  purchasing private health insurance 

How health insurance offers coverage 
Health insurance is a type of insurance that offers coverage for the medical and surgical expenses a policyholder may incur.  There are two methods in which health insurance companies pay for the policyholder's medical and surgical expenses. These methods include:

The reimbursing of the policyholder that has paid for their medical or surgical bills
Directly paying the cost of medical or surgical expenses to the policyholder's care provider 

However, the method of payment most health insurance companies tend to adopt depends on the health insurance policy or coverage. 

Relationship between health insurance companies and their policyholders 
When it comes to the relationship between health insurance companies and those who benefit from the financial protection they offer, there are two essential terms one can use for their descriptions. These terms include provider and insured. 

Health insurance companies use the term "provider" to represent healthcare providers and healthcare facilities to treat an individual, such as a clinic, hospital, doctor, laboratory and pharmacy. 
The health insurance policy is purchased and owned by the "insured," they are also called policyholders. 

Health insurance terminologies 
There are various terminologies pertaining to health insurance, which you should understand before you can comprehend anything with ease about health insurance without being puzzled. We've also discussed a few in our comprehensive insurance guide so make sure you read that article aswell. Health insurance terminologies include the following:

  • Premiums
  • Deductible 
  • Coinsurance
  • Copayment 
  • Out-of-pocket maximum 
  • In-network 
  • Out-of-network

Premiums
This is the amount of money a policyholder will be required to pay their health insurance company monthly and yearly, on a regular basis for the health coverage they offer. 

Deductible 
A deductible is the amount of money a policyholder is expected to pay out of pocket for the treatment of their medical conditions before their health insurance coverage kicks in. Generally, a higher deductible simultaneously mitigates the premium rate. 

Coinsurance 
This is the predetermined debt a policyholder owes to a medical provider primarily after the payment of their deductible. For instance, if the insurance policy's coinsurance is twenty percent, and the insured needs cover for a medical bill of $200, the insured will be in debt of $40.

Copayment 
A copayment is similar to coinsurance in all ramifications except that the policyholder will have to make their copayments at the of their treatment without waiting for the payments of their deductibles. Viz. The policyholder will be required to pay a specific amount of money each time they visit any healthcare specialist or physician. 

Out-of-pocket maximum 
Out-of-pocket maximum, as the name implies, is the maximum of money the policyholder is expected to pay for their deductible and coinsurance charge before the health insurance company kicks in and starts providing coverage for all the expenses the policyholder incurs according to their insurance policy. 

In-network 
In-network is a health insurance term used to describe the healthcare facilities and healthcare specialists or physicians covered under the policyholder's insurance policy. They have negotiable low-rates with in-network care providers, which results in an affordable cost of care services. 

Out-of-network 
Out-of-network is a health insurance term used to describe the healthcare facilities and healthcare specialists or physicians that are not covered under the policyholder's insurance policy. They are quite expensive than in-network care services primarily because there has not been any form of lower rate negotiations between the policyholder's insurance company and the out-of-network healthcare providers. 

Types Of Health Insurance 
There are mainly two types of health insurance that may subdivide into several categories. The two types of health insurance include public health insurance and private health insurance. 

Public health insurance 
Public health insurance is primarily government-funded health insurance designed to offer medical and surgical expenses coverage for low-income individuals, older adults above sixty-five years of age and younger people that qualify for social subsidies. There are primarily two types of government-funded health insurance programs:

-  Medicare 

-  Medicaid

Medicaid is a type of public health insurance program controlled by the federal government designed to offer coverage to older adults above sixty-five years of age and younger individuals with disabilities. On the contrary, Medicaid is another type of public health insurance program controlled by the federal and state government to offer coverage that is not restricted to older adults and the disabled alone. They also cover children and several individuals with low incomes. 

Private health insurance 
Private health insurance is a type of health insurance controlled and funded by private companies to cover the medical and surgical expenses a policyholder may incur in exchange for their premiums, coinsurance and copayments. Hence they are more expensive than public health insurance. 

Although these types of health insurance have several differences in the advantages they provide over the other, such as their costs–expensive or cheap health insurance plan–they still offer a universal benefit of financially protecting policyholders from high medical and surgical costs. 
 

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