Illnesses and accidents can happen to anyone and at any time. No one envisions oneself getting sick or hurt, but most need medical care at some point in their lives. Health insurance covers these medical care costs and protects you and your assets, which you have worked so hard to acquire, from unforeseen and what may be significant expenses.
Health Insurance Can Protect You from Unexpected Health Events
Health insurance serves as a contract between you and your insurance company. When you purchase a health insurance plan, the insurance company agrees to pay part of your medical costs when you get sick or hurt. It’s not all this simple, however. You need to consider what is appropriate for your and your family as well as your out-of-pocket costs and monthly premium.
Also be aware that, under the Affordable Care Act, Health Insurance Marketplace plans along with most other insurance plans provide free preventive care, including check-ups, screenings and vaccines. These plans also cover some prescription drug costs.
A one-day hospital stay costs from $1,900 to $2,500 in the United States, and, on average, hospital stays last about five days. Most people can’t afford even one day in a hospital without having it impact financial stability. Having health insurance coverage can help protect you from having to bear any unexpected and sometimes significant costs.
Understanding How Health Insurance Coverage Works
- Premium: A premium is a set amount you pay to your health insurance plan, usually monthly. You pay your premium even if you don’t use medical care during a given month.
- Deductible: If you require medical care, a deductible is the amount you pay for care before the insurance company starts to pay its share. Once you fulfill your deductible payment, your insurance company begins to cover some care costs. Some plans feature lower deductibles such as $250, and some have higher deductibles such as $2,000.
- Copayment: A copayment is a fixed amount you pay for a medical service after you’ve fulfilled your deductible payment. After meeting your deductible, you may pay $25 for a doctor’s office visit that would ordinarily cost $150 if you didn’t have coverage, for example. Your health insurance plan covers the rest of the payment.
- Co-insurance:Co-insurance is similar to copayment with the exception that it’s a percentage of costs you pay. You may pay 20 percent of the total cost of a medical bill running $100, for example. In this case, you would pay $20, and your health insurance plan would pay the remaining portion after you have paid your calendar year deductible.
How Health Insurance Can Protect You From High Medical Costs
- Out-of-pocket maximum: The out-of-pocket maximum is the amount you have to pay if you require medical assistance. If your health insurance plan has a $3,000 out-of-pocket maximum, for example, once you pay $3,000 in deductibles, coinsurance and copayments, the plan will pay for any covered care above this amount for the remainder of the year.
- No yearly or lifetime limits: Health plans in the Health Insurance Marketplace can’t place dollar limits on how much they’ll spend each year or during your lifetime to cover essential health benefits. After you’ve reached your out-of-pocket maximum, your health insurance company must pay for all your covered medical care without limit.
Living without health insurance can place you at serious financial risk. Remember that if you or someone in your family suffers from an illness or accident, those without coverage may fall into deep debt or even declare bankruptcy.
BeneFinder’s agents can help you save money and time while finding the best health insurance plan for you and your family.
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