25 Aug Health Insurance: Understanding the basics
Health insurance basics should be familiar to all
If you are new to the health insurance world, there are many terms and items which may be unfamiliar, and that’s totally fine.
But everyone should have a basic understanding of what health insurance is and why you need it.
While health insurance doesn’t always cover all of your medical costs, it will help you share costs until you reach the out-of-pocket limit.
Once you hit this threshold, most plans will then cover 100% of your medical costs.
Other items you should familiarize yourself with include:
- Deductible – This is the total number you pay before the insurance provider begins covering a portion of the cost of medical expenses
- Copay – This is a flat amount someone will pay when they receive medical care or purchase a prescription drug
- Coinsurance – this term refers to the percentage of medical costs that someone may have to pay after the deductible; may vary depending on the insurance plan
- Healthcare provider – this refers to any healthcare professional such as a doctor or medical facility
- Prescription Drugs – refers to drugs that are given by a physician and that can’t be given without a prescription
- Network Provider – a physician or facility that is part of an insurance plan’s network
- Out-of-Network Provider – this refers to a provider who is outside of the insurance plan’s network of physicians
Why do you need health insurance?
In simple terms, anyone and everyone should have health insurance in some capacity. Whether you are in your 20’s and out of the home or a family with your first child, health care plans should be explored no matter your situation or stage in life.
Medical expenses can be a burden for many people, but they shouldn’t be. There is no reason to rack up debt which will lead to financial problems among others.
If you don’t have insurance and occur medical expenses, paying out-of-pocket will be difficult.