A very common question – what is health insurance? Trying to figure out health insurance (HI) coverage may be as tedious as learning a new language.
However, you don’t have to worry about that because we will talk in detail about what exactly health insurance is. The jargon will be unwrapped for you and laid out to seal the deal with confidence and get the insurance you need to protect your health and finances.
What Is Health Insurance?
At its very core, HI covers the cost of hospitalization, surgery, emergency department visits, regular check-ups, and prescription medications. Some HI policies also cover dental and vision expenditures.
Generally speaking, health insurance, often known as medical insurance, is intended to transfer risk from you to the insurance company. It helps you avoid getting buried under a mound of medical debt that you can’t afford to pay back. One of the most important reasons for having HI is to avoid financial risk. Here are some of the best health insurance companies for you to give you the more idea about the health insurance.
Only two types of HI are offered to individuals: privately purchased policies and publicly-funded plans. Selecting among the many HI options may be like attempting to pick the best movie streaming service for a Saturday night binge on Netflix (but without the joy).
Employer-provided insurance is what you get via your employment or union. You may select plan options available via the government-run healthcare exchange during open enrollment (Healthcare.gov).
On the other hand, the federal government provides public healthcare plans, including Medicare (for 65+), Medicaid (low-income families), and Department of Veterans Affairs coverage.
What Is Individual Health Insurance?
Individual health insurance plans are acquired on an individual self-finance basis and are referred to as such. People purchase through the marketplace rather than via their employer or a government agency, and it is the most common kind of insurance.
What Is Group Health Insurance?
Group health insurance policies, such as those supplied by an employer, cover a particular group of individuals. Many HI firms operate similarly in the same way that you may purchase paper towels, granola bars, or gummy bears from your local bulk market.
A group health insurance plan, may help you save money by reducing the cost of individual policies for everyone in the plan. But don’t assume that your employer’s plan is the best one for you. It is possible to save money by shopping around a little and searching for the most viable option.
What Is a Health Insurance Premium?
Premium is the amount you pay each month (or year, depending on the plan) to cover your medical expenses. If you look at the premium that you are paying regularly, it’s easy to feel that you’re on the most costly HI plan rather than the most affordable. But don’t worry; everyone with a health plan feels the same.
Think of the premium as an emergency fund. Suppose you have an illness which costs you over $50000 in hospital bills. Now, if you have a health plan, your insurance will cover most of the cost. On the contrary, a $50000 bill may put you on the brink of the poverty line if you don’t have a health plan.
You should choose a HI plan with a larger deductible if you want to reduce premium costs. However, you have to pay a large sum of medical costs before your insurance starts to cover them.
Furthermore, if your HI plan meets certain requirements, you may also be able to open a Health Savings Account (HSA). HSA is a tax-free way to save for and pay for medical expenditures that are not covered by your HI.
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