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Health Insurance Frequently Asked Questions (F.A.Q)
Maybe the answer to your question is here. Here's
a list of our most frequently asked questions...
If you have questions understanding health insurance related terms, you are more likely to find the information you seek in the Glossary section..
Most Frequent
Answers:
Do you need health insurance?
To most of us, this is probably just a rhetorical question. We have all
heard horror stories of families or individuals who thought they could
get along without health insurance. They dropped their policy or didn't
even take one out so that they would save money every month.
Then a catastrophic event happens-a major illness or an unexpected accident (are there any accidents that are expected?).
One major medical occurrence alone can wipe out the savings and assets of most people. But what about those "smart" people who "save" money each month by not having health insurance. Even if they put the money in the bank and save it for that possible accident or illness, it will probably not build large enough or fast enough to cover more than a minor medical condition.
And if they should contract a serious illness or suffer a major accident, they may be uninsurable for a long time (even for life in some cases).
The answer seems clear then- YES, you need health insurance. However, health insurance is not like buying other goods and services. You really need to buy it when you aren't using it. If you wait until you need it (when you're sick or injured), it will be too late.
We urge you to use this information to help you save money on the health insurance you purchase. In order to understand how you can save money, you have to know a little bit about how medical expenses are escalating and how insurance policies are structured.
Why does it cost so much?
There are more doctors, more medical services and more treatments
available every day in America. And with third-party payers (insurance
companies and government programs such as Medicare) making the actual
payments to the doctors and medical facilities, the use of medical services
has been increasing rapidly.
When you feel as though "someone else" is paying for the service, you're more likely to agree to services and procedures you would otherwise further investigate. "That's OK, my insurance will pay for it "has often replaced a more consumer-oriented: "Is it really necessary? Isn't there another alternative? What is the most cost-effective approach? If I didn't have insurance, would you still recommend this test or treatment?"
Unfortunately, even though it feels like "someone else" is paying the expenses, you are ultimately the one footing the bill. You don't directly write the check, but excessive and unnecessary medical charges are an important factor in the rate at which insurance premiums increase for everyone.
So what can you do to help solve this problem? The answer lies in individual action to control your own costs-when you purchase your health insurance and each time you seek medical treatment. The rest of this information will help you plan out your own insurance. Needs and understand the cost containment programs that some insurance companies are now using to help you lower your cost
What is the best way
to design my policy?
There are several important factors in your health insurance
policy that can result in cost savings for you-if you know what you and
your family need. Some insurance companies allow you to choose from various
options on these items. You should also try to assure that you can make
changes in the future in case your needs or budget changes.
DEDUCTIBLES
A deductible is the amount of covered medical charges you must pay on your own before your policy begins to pay benefits. Generally, the higher the deductible, the lower your insurance premiums.
Many policies have a wide range of deductibles available, especially for the hospital portion of your coverage. Deductibles may range from $200, to $1000, all the way up to $10,000.
If you are trying to keep your insurance premiums low, while still protecting yourself from catastrophic medical expenses - the kind that could run into hundreds of thousands of dollars and force you to sell your home and other assets - you will probably want to keep your deductible fairly high. By selecting a higher deductible, your regular insurance premium payment will be lower. This would mean your out of pocket expenses would be higher if you do have an illness or injury, but you have saved money each month through lower premiums.
COINSURANCE
A coinsurance is the percentage of covered medical expenses you pay out of your own pocket after you have met your policy deductible.
While policies that pay 100% of covered charges are quite expensive. People who are more concerned with their budget have tended to look toward policies with coinsurance. Probably the most popular coinsurance option available on many policies today is the 80/20 type plan.
With an 80/20 plan, after you have met your policy deductible, you pay 20% of the covered medical charges and the insurance company pays 80%.
There are other configurations of the co-payment available. Many companies offer 70/30 or 50/50 type plans. As the second number increases, it means you pay a larger percentage of the covered expenses. Please keep in mind as with a PPO Plan your Coinsurance is different when you are in network and when you are out of network. While you may want to consider this type of policy when you realize how much you can save in regular insurance premium payments.
How do I choose the
right insurance company for me?
In addition to looking at the benefits and cost-saving measures
of a health insurance company you should also consider the insurance company
itself. While there are many rating systems around these days, some of
them measure aspects that are really don't relate to the service or safety
you would receive as a policyholder.
It's also important to realize that "average" rated companies with long histories in business may be more secure for you than newer companies that currently have high ratings. Those high ratings could diminish; you may be safer with a company that shows more consistency and perseverance.
There are two main areas which you should question when selecting a health insurance company:
SERVICE
Try to be sure that the company is service-oriented. They should have a standard response time for policy holder inquiries and they should tell you what it is. They should also have a standard for claim handling time on the average. You want to be sure that when you have a question or a claim that it will be handled accurately and promptly.
ASSET SAFETY
One of the best measures of security and long-term stability of an insurance company is the make-up of its investment portfolio. If its assets are secure, then you can have greater peace of mind that your future claims will be able to be paid.
Insurance is a risk business. The insurance company takes a risk when it issues you a policy. The only way to maintain your security in this risky business is to assure that the assets standing behind your policy are safe and secure.
You should look for a company that has a strong and conservative investment philosophy. It should have the vast majority of its investments in investment grade securities. While these types of investments don't have the big yields of some junk bonds, they also do not have high risk associated with them.
In short, you want to know that:
The insurance company you choose has a policy with the benefits you need
What questions should
I ask when looking for a new policy?
You should ask question in the following areas:
POLICY BENEFITS AND PREMIUMS
COST CONTAINMENT
SERVICE
What are some tips for
saving money?
Here are some tips on saving money on health insurance
Elect A High Deductible - Choosing a high deductible could greatly reduce your monthly premium. Always ask your insurance agent for all the deductible options. Some insurance companies offer very attractive rates on different deductible options. Be prepared to meet the deductible if disaster strikes.
Take On More Co-Payment Responsibility - Select a plan with 80/20, 70/30, or 50/50 Coinsurance. Coinsurance is the percent of covered medical expenses you share with the insurance company after you have met your deductible. The most popular coinsurance option is the 80/20. With an 80/20 plan, you pay for 20% and the insurance company pays 80% of the covered medical expenses.
Don't Buy All The Bells And Whistles - Some policies allow you to add and delete optional riders on a policy. For example, adding an unlimited doctor option can increase an insurance premium up to $100/month. However, most doctor visits average $60/ visit out of pocket. If you are somone who doesn't frequent the doctor's office, not selecting this option could mean hugh savings for you.
Stay Healthy - Dieting and excerising has been proven to reduce body fat and cholestoral. Consider a program to stop smoking if you are a smoker. Non-smokers are rewarded with better rates from insurance companies.