Insurance for Everyday Living: Health Insurance

By Gaurav Bhola, Managing Editor
Thursday, August 23, 2007


Want to turn a smile upside down, just mention the word insurance to someone. The word insurance sends shudders through people, but insurance is often necessary. As consumer needs have changed over time, so have the products offered by insurance brokers. There are many flavors for each type of insurance such as life insurance, health insurance, car insurance, business insurance, home insurance, travel insurance, disability insurance, medical insurance, and more. It is critical that you get the appropriate coverage to protect yourself, your family, your finances, and any business.

If you don’t like insurance, just take it as if you would take bitter tasting medicine, you may not like taking it but it is good for you. The essential insurances to consider are health insurance, disability insurance, life insurance, auto insurance, and homeowner/renters insurance. Today, we cover Health Insurance.

HEALTH INSURANCE

What is it

An all-inclusive term that applies to all forms of insurance that reimburse or indemnify for losses caused by sickness or bodily injury for medical expenses incurred during treatment as dictated by sickness or accidental bodily injury.

The choices

Managed Care: structured method of administering distribution of health care services. In many cases, it limits caregivers insured can see, services provided, and number of visits.

Fee-for-Service plans: also called indemnity insurance, you can choose any doctor, clinic, or the hospital for medical service. All or part of the cost of service is paid by insurance according to your policy.

Health Savings Accounts (HSAs): a substitute to traditional health insurance; modeled after Medical Saving Plan (MSAs). It is a saving account that allows you to deposit pre-tax monies, you can invest your funds in the same types of investments permitted in an IRA (stocks, bonds, mutual funds, certificates of deposit, etc), your investment grows or goes down if you invest in securities, and you can use those funds tax-free to pay for health expenses.

Point-of-Service plans (POS): a hybrid of a PPO and a HMO, plan allows the insured’ to select caregivers outside the health plan but insurance companies encourage the use of network providers.

Preferred Provider Organizations (PPOs): managed health coverage inclusive of hospitals, clinics, doctors, and other health caregivers. Unlike a HMO, You can use caregivers not in your plan network and still receive some coverage, but you have to pay more.

Health Maintenance Organizations (HMOs): prepaid, complete health coverage for access to medical doctors, clinics, and hospitals.

Which choice works for me

If healthcare insurance is available to you at work, by all means take advantage of it. Due to the leverage of a group of employees, group health insurance is much more affordable than an individual health insurance plan.

If you decide upon an individual policy, remember you will not receive the group discount. Furthermore, you will have to go through underwriting and risk being declined for the health policy based upon what the underwriter discovers.

Any policy you choose, it is critical that you maintain coverage. If you have a “life event” such as, marriage, adoption, birth of a child, or etc. inform the insurance company within 30 days of the life event if want to include your new spouse or dependent to the policy; otherwise if you wait beyond the 30 days you’ll have to wait until the next open enrollment before they can be added to your coverage.

How it can help you

Medical treatment can be very expensive, in many instances exorbitantly expensive for most people. Health insurance can protect you, your family, and nest egg; if something were to happen.

By having it you can evade expensive medical bills and avoid going into severe debt; possibly one you can’t extricate yourself out of

If you don’t have it, the only choice you might have is to the emergency room which can cost 20 times more than routine care.

Before, seeking out health Insurance, do your homework. Spend time researching the different choices of health coverage at work before you signup, even call the insurance company before making a final decision. Also, if you want an individual health insurance policy, call various insurance companies and request insurance quotes in order to find coverage best suited for your needs. Doing your research can save you thousands in medical bills later and headaches in filing claims with insurance companies.



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