Health insurance is a type of insurance which covers the costs of medical and surgical emergencies, illness, and injuries incurred by an insured individual.
Health insurance reimburses the insured for the expenses occurred during any medical or surgical treatment.
Health insurance is different from mediclaim as mediclaim covers hospitalization costs only whereas health insurance is a more comprehensive insurance policy.
Why Health Insurance is Important?
The cost of medical treatment is increasing rapidly. At the same time, health problems are also gradually increasing with more and more people becoming unhealthy. This results in an increased healthcare cost, and if you don’t have dedicated savings for medical emergencies, arranging a big amount of money urgently can be a daunting task. This problem is faced more by older people because they are more susceptible to sudden health problems.
Health insurance solves this problem by providing considerable flexibility for disease and ailment coverage. Health insurance covers more than 30 critical health problems, and more than 80 surgical procedures. The insurance plan pays about the cost of the surgery or the treatment irrespective of the actual medical expenses. The insurance policy continues after the benefaction payment.
Health insurance assures your health, and financial wellbeing making it vital for people who are responsible for the health, and financial well being of there family.
What are the different types of Health Insurances?
* Private health insurance: Private health insurance is offered by private organizations. In the US, more than 65 percent of people under the age of 65 have private health insurance.
* Public health insurance: Public health insurance is offered by public health organizations in exchange for a premium. Some popular public organizations in the United States are Medicare, Medicaid, the Veteran’s Health Administration, and the Indian Health Service.
* Managed care plans: In managed care plans, the insurer has contracts with various healthcare providers to give low-cost treatments to their policyholders. Treatment in hospitals not in the network is provided, but with additional costs and penalties.
* Indemnity, or Fee-for-service plans: This plan allows the patients to undergo treatment with any healthcare providers of their choice without paying any penalty. In the indemnity plan, the insurer pays 80 percent of the expenses, and the patient pays the rest.
* Health maintenance organizations (HMOs): Health maintenance organizations provide directly insured medical care in which a dedicated primary care physician is responsible for all the care.
This is usually the cheapest type of plan.
* Preferred provider organizations (PPOs): Preferred provider organizations have a network of approved providers with which they have partnered at negotiated costs. In this plan, the insurer can visit any doctor he wants to visit, provided he is in the network of the organization.
* Point-of-service (POS) plans: Point-of-service plan is a fusion of Health maintenance organizations plan and Preferred provider organizations plan. In the POS plan, the insured can choose between getting care from a single physician, or the physicians within the network, or doctors outside the network.
How much does a Health Insurance cost?
The average health insurance depends upon the age of an individual. An average American under the age of 18 years pays the health insurance premium of $152 per month. A person between the age of 18 and 24 pays a monthly premium of $177. A person between 25-34 pays a monthly premium of $239 and a person between 35-44 years pays $303 monthly. People between 45-54 years of age pay $400 monthly.
Family plans also start from a monthly premium of $873.
How to choose the best Health insurance plan?
A few criteria need to be considered when opting for a health insurance plan. Some of the important criteria are listed below.
* Understand your needs and requirements, how many members are in your family, their age and your main aim with the insurance plan.
* A higher sum assured is important if you are living in a tier-one city, but always be conscious of neither being under-insured or over-insured.
* Coverage of a total number of critical illnesses and surgeries is also vital. The number of illness and surgeries the plan covers, the better it is.
* Hospital Network of the plan should be big with good and trusted hospitals
* Tenure of Health Plan and its renewal is important. Choose the renewal frequency that best suits you.
James Eckardt is the founder of Peak Advisors Inc., a boutique insurance brokerage on Long Island, NY. The firm has a stellar record of service with three decades of experience in health insurance coverage and hundreds of clients including small businesses, commercial enterprises, sole proprietor-ships and seniors.