subject: Individual Health Insurance Plans FAQ [print this page] Individual Health Insurance Plans FAQ
Most major medical plans require a deductible be paid before they pay out. Additionally, after the deductible has been met, you can expect coverage to be about 80% of the total medical expense incurred. Another feature of major medical plans is that they tend to have high maximum limits- from about $500,000 to $1 Million. Moreover, major medical plans usually cover a wide range of medical costs including prosthetic limbs, x-ray/lab services and prescription drugs, for example. Easy To Insure ME has the answers
Therefore, while major medical plans often offer a wider range of coverage and high maximum limits, they require the insured to share in the costs. On the other hand, basic plans have lower cut off limits, but initiate immediately to cover 100% of the costs. What is needed here is careful consideration- it's important for you to weigh both options very carefully before choosing the individual health insurance that works best for you.
Are there expenses which are not included in major medical plans?
In short, yes. There are a number of expenses generally excluded from major medical plans. Some include (but are not limited to): elective cosmetic surgery, custodial/convalescent care, injuries or illnesses already covered by workman's compensation, routine vision and/or dental examinations and annual/routine physical examinations. Read your policy carefully, as all plans vary in what they exclude or include in coverage.
Are substance abuse and mental illness covered by health insurance?
Yes. Treatment for both substance abuse and mental illness are generally covered by major medical plans. However, the insurer may require a higher co-insurance and may reduce the benefits of the policy overall. Additionally, the amount of coverage often depends on the location of the treatment- that is whether it is done on an outpatient or inpatient basis.
What do policies mean by "co-payment"?
A co-payment (sometimes called a co-pay) is a previously specified amount to be paid by the insured at the time they utilize services. Co-pays are generally found in HMOs which often require co-pays for prescriptions and/or office visits for amounts ranging from $5 to $30.
Please define "co-insurance" and explain how it works.
Co-insurance is often called Percentage Participation and requires the participants to pay for a previously-agreed-upon percentage of the services rendered. For example, if your coverage is 80/20, you would pay 20% of the costs incurred and your provider would pick up the remaining 80%. Co-insurance policies usually have a cap or stop-loss limit so that your out-of-pocket expenses can't go beyond two or three thousand dollars per event. After reaching that dollar limit, your provider would pay the entire claim up to the maximum amount set out by the policy.
Are there some out-of-pocket expenses with major medical plans?
While major medical plans will include most expenses, you can expect to pay previously agreed upon co-pays or deductibles. For example, if you have an 80/20 co-insurance plan, you can expect to be charged 20% of the costs incurred. Additionally, many insurers will not cover procedures that they deem unnecessary or unreasonable. Providers differ widely on what would constitute "necessary" or "reasonable" care and so, if you are not faced with an emergency, it's always good to check with the provider before incurring the expense.
What is meant by "pre-existing conditions"?
A pre-existing condition is a medical problem that the insured had- knowingly or unknowingly- for a specified period of time before the date that the policy became effective. Although most policies exclude coverage for pre-existing conditions from three to six months, some may go back as much as a year. Take the time to understand a policy's pre-existing condition clause before signing on the dotted line.
How do HMOs vary from major and basic medical plans?
With major and basic plans, the insured is generally the one responsible for submitting claim forms for services rendered and following up on the submitted claims. Additionally, major and basic medical plans usually require deductibles or co-pays which add to the out-of-pocket expense of the insured. While the expenses covered by major and basic plans can vary from policy to policy, both generally allow you the freedom to choose your own physician.
HMOs, on the other hand, generally restrict the insured to a previously chosen network of healthcare providers which thereby limits the insured's choices. HMOs often require no deductibles or co-pays and generally offer fewer exclusions to coverage. Some HMOs will allow you to seek care outside of their network for nominal co-pays.
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