Health Insurance
Health insurance is on everyone's minds today... seems like all you hear in
the news media today is about health insurance. It can all be confusing,
so here is some straight forward information.
Explanation of Terms and Coverages...
Health insurance is an option for making health care more affordable for you
and your family. Purchasing health insurance for you and your dependents
will make it easier for you to get proper health care when you need it,
because your insurance will help defray the cost.
Group or
Individual
Health insurance is available through two types of plans, Group Plans and
Individual Plans. A group plan and individual plan may provide identical
coverage. The difference is in the way the two types are accessed. Group
Plans are offered through an employer or association; individual plans
are purchased independent of any affiliation.
Although most group policies are suited to the average person, often
with provisions to cover family members, group policy premiums usually
cost less than premiums for individual plans.
Choosing Health Coverage
Consider the following features when comparing health care
coverage.
How
much will you pay out-of-pocket?
Deductible:
This is the initial dollar amount you must pay before your insurance company
begins paying for health services. Usually, the higher the deductible, the
lower your premium. However, do not choose a deductible so high that you
cannot afford to pay it. The contract will dictate the specific amount you
pay per year for your family. You must pay a deductible each year, which
will vary depending on the number of people covered by the policy.
Coinsurance:
Coinsurance is the share or percentage of covered expenses you must pay in
addition to the deductible. For example, your policy may pay 80 percent of
covered charges after you pay the deductible. You would then pay the
remaining 20 percent as coinsurance.
Copayment: A copayment is a specified dollar amount you pay, as a subscriber to a
managed care plan, for covered health care services. It is paid to the
medical provider at the time the services are rendered.
Premium:
The monthly or annual amount you will pay for your insurance policy.
Coordination of Benefits Provision:
Even if you have more than one group policy, you cannot receive more
benefits than your actual hospital and medical expenses.
Even if a husband and wife each have family coverage under separate group
policies, they cannot collect on the same claim twice, even if they have
paid two premiums.
Renewal and Premium Increase Provisions:
These provisions determine the conditions under which you lose your
eligibility, without a medical exam to prove you are in good health.
Questions and Answers about Premiums
|
Q. Why
do companies raise premiums? |
A.
Insurance companies raise premiums when the cost of claims they must pay
increases at a faster rate than expected. One main cause of premium
increases is medical cost inflation, which measures how much more a
particular procedure costs each year.
Medical Utilization,
or the number of times doctors perform a procedure each year, can also
cause premiums to increase.
Cost
Shifting
is also responsible for an increase in premiums. Cost shifting occurs
when hospitals charge paying patients more money for their stay in the
hospital. This offsets their cost of caring for non-paying or indigent
patients.
New technologies and medical malpractice claims also increase the cost of
health insurance. |
|
Q. What do your premiums pay for? |
| A. Premiums help pay
policyholders' claims, and other expenses, such as producers'
commissions, premium taxes, and administrative expenses. |
|
Q. How are premiums determined? |
A. An insurance company
considers many factors when setting premiums. Some of these
include:
- Medical Care Costs
- Coverage
- Age of policyholder when policy is issued
- Current age
- Health
- Habits (such as smoking)
- Geographic area
Waivers (a waiver of premium
if you choose this option, you would pay more each month in
premiums. In return, if you became sick and could not pay your
premium, the company would pay it.)
Source: Alabama Department of Insurance |
Make sure your insurance is keeping up with you..
Locally you can call
(636) 239-1130
Or try our toll free number
(877) 919-1130
|
