How Health Insurance Works
How Health Insurance Works
A Health Insurance policy is a binding contract made between two parties, an individual and the insurance company. The contact can also be between a sponsor such as a company and the insurance firm. This contract can be renewed on a monthly or annual basis. The costs that will be covered by the health insurance company will be specified in advance by the insurer and signing of the form indicates an agreement to the terms on offer.
Premium: A premium is the amount of money which an individual or sponsor pays to the insurer for a health plan coverage. This premium can be paid monthly or annually depending on the insurer.
Deductible: This is the amount of money which the insured individual pays out of their own money before the insurance company pays the rest. An example is say, a policy holder may have to pay $600 deductible per annum before the insurer covers their health care. The insured individual may have to make a couple of doctor visits to reach their deductibles before the insurance firm can start paying for the care.
Co-payment: A co-payment is the amount of money that an insured individual must pay out from their own money before the insurer pays for that service or visit. An example would be say the insured individual pays $50 co-payment for a prescription or doctors visit. Each time that particular service is required, that amount has to be paid.
Coinsurance: Coinsurance is the addition payment to the co-payment amount. It is a certain percentage of the total cost of the service obtained. For example, a policy holder may have to pay 30% of the cost of an operation over and above the co-payment. The insurance company will pay the other 70% that is if there is an upper limit on coinsurance. In the end, the policy holder may end up owing very little or a lot more, all depending on the cost of the service they obtained.
Exclusions: In an Insurance health plan, it is not all services that are covered. An insured individual is to pay the total cost of all those services which are not covered from their own money.
Coverage Limits: Not all insurance companies cover all costs. Some health insurance plans pay for health care only up to a certain amount. Any charges or amounts that exceed the maximum health care amount will be paid for by the insured individual. In other cases health insurance companies offer maximum life time coverage. In this case the health insurer will stop coverage when they reach the maximum benefit and the remaining costs will be paid for by the insured individual
Out of pocket maximums: This is similar to coverage limits, except that the insured individual's payment right stops when they reach their out of pocket maximum and then the health insurance provider pays all the remaining costs.
Capitation: This is the amount of money the insured pays an insurance company so that the insurance provider agrees to treat all the insured's individual's members. Types of Health Insurance Why Do We Need Health Insurance? Las Vegas Health Insurance How to Save Money Buying The Health Insurance Through Online Correctly An Apple a Day will Keep the Doctor Away… View on Health Insurance Quotes from Goodhealthquotes Learn About Affordable Health Insurance High Deductible Health Insurance Plans Health Insurance For Dummies Health Insurance For The Self Employed Research Before Signing On Health Insurance Want Cheaper Healthcare Insurance Quotes? Try The Following Tips Extended And Trusted Cigna Health Insurance Coverage Packages