What is private health insurance?
With so many names surrounding health insurance these days it’s hard to know what each stands for. Private health insurance is provided by companies other than government entities. There are several features to private health insurance that many people know and many features that they don’t know about.
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According to California’s Department of Managed Health Care most private health insurance companies offer individual health insurance. Individual health insurance is simply health insurance you buy on your own and not employer provided group health insurance.
What are some features of private health insurance?
With private health insurance there can be many different plans and policies to consider. Some private health insurance companies will work with you to find an individualized plan and others will not. It’s important to know how much you’ll be paying out of pocket with any policy. While most people know about premiums, they aren’t as familiar with the other out of pocket expenses.
Premiums are the monthly or annual amount you pay to the health insurance company to purchase your coverage or plan.
Plan mandated health insurance deductibles are another out of pocket expense for the insured. This is the amount you’ll pay beforehand for medical care until the insurer will take over and start paying their share.
Copayments are the amount a person will pay out beforehand during a single visit. This may be for both doctor visits and emergency room visits. An insured person may have to pay a copayment when they visit the doctor for a checkup and then the insurance company will pay the rest of the cost of the visit.
Sometimes instead of copayments there is coinsurance. Coinsurance is a percentage of the total cost of the medical care received to the insured. This can be 25% of the cost of medical care, which is very similar to copayments. There are plans that require both coinsurance and copayments alongside the total cost of medical care.
What features might not be included?
Exclusions are another name for services not covered. It’s important to check out everything before signing with an insurance company. Exclusions will arise, but it’s essential to know what prescriptions and medical services are not included for coverage.
Many times you’ll see coverage limits with insurance policies. Coverage limits are basically a limit to the total coverage payments an insurance company will make for any one policy. In these cases the insured person will be expected to pay for those charges that exceed the predetermined maximum amount for specific services.
Out of pocket maximums are similar to coverage limits, but insured individuals payment obligations will end when they’re reached out of packet maximums and the insurance company will then take over.
In some cases you’ll need prior authorization from your insurance company before seeking out medical care. If you do not do this and seek out medical care anyway, they may not pay the bill even if it would have been covered with authorization.
Why should you know everything about your policy?
We all make mistakes when it comes to purchases, but making a mistake in your private health insurance policy can be very expensive. It’s important to read all the fine print of a policy before signing on with it.
According to MSN Money it’s important to assess what you need in health insurance coverage. It’s rare to find a health insurance policy that will meet all your needs and want, but you can get close to it if you’re proactive.
One big mistake people make with their private health insurance is signing with a policy that doesn’t have your current doctor in their network. Make sure you’re going to get the coverage you need with the doctors you want.
Knowing the details of your private health insurance can save you money in the long run.
Many times people will opt to pay for a higher premium and a lower deductible. However, with a lower deductible you are more likely to seek out care you don’t really need. Insurance companies know this and will balance this by overpricing the premiums on low deductible plans.
For those who need prescription medication it’s very important to find out what prescriptions are included with your health insurance plan. Many times these policies will have exclusions on certain brand name medications.
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